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Lufthansa profit soars 70pc to US$3.7 billion as sales jump 12.4pc


GERMAN flag carrier Lufthansa's 2017 operating profit soared 70 per cent year on year to EUR2.97 billion (US$3.7 billion), drawn on revenues of EUR35.6 billion, which jumped 12.4 per cent,

For 2018, the company expects an adjusted EBIT only slightly below previous year. Organic capacity is expected to increase seven per cent.

Separately, the supervisory board of Deutsche Lufthansa has appointed Carsten Spohr as CEO for five more years, extending his through December 2023.

Lufthansa said it profited from the scarcity of aircraft following the grounding of Air Berlin, which pushed up ticket prices as unit costs fell.

The airline also secured its former rival's jets. That, coupled with its acquisition of Brussels Airlines, helped Lufthansa's revenue rise the fastest in seven years.

The profits boom is expected to end this year after three consecutive years of records because of the gap left by Air Berlin.

But that gap is being quickly filled by more potent carriers including EasyJet and Ryanair, thus Lufthansa's operating profit is expected to decline this year as fuel costs rise.

Lufthansa said it is beefing up its own budget carrier, Eurowings, but its plan to expand that unit to 210 aircraft was postponed by a year as monopoly concerns prompted Lufthansa to pull out of the bidding for parts of Air Berlin.

Major pay deals with cabin crews and pilots meant years of strikes came to an end in 2017, and agreements also included shifts toward defined contribution pension plans for flight attendants and pilots, easing the company's pension deficit.

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