Iberia profits down 98 per cent

Iberia profits down 98 per cent

Iberia has reported a 98 per cent drop in half-year earnings on the back of high fuel prices and the global economic slowdown.

Operating profit at the Spanish carrier for the months of January to September dropped to 8.2 million euros ($10.35 million) and net profit fell to 51.1 million euros compared with 223 million euros a year ago.

Analysts have complimented Iberia on a strong balance sheet but say that, like other airlines, it faces strong economic headwinds and limited benefits from falling oil prices due to its hedging.

The airline also reported its traffic and capacity statistics for October, which showed an 8.6 per cent drop in passenger traffic.

Cathay Pacific expects disappointing 2008 results

Cathay Pacific expects disappointing 2008 results

Cathay Pacific Airways has said it expects “disappointing” 2008 results from weak passenger revenue and substantial losses from fuel hedging contracts.

The Hong Kong based airline said yesterday the recent decline in fuel prices has resulted in HK$2.8 billion (£227.6m) in mark-to market losses on its fuel hedging contracts.

The loss amounts to about 40 per cent of its 2007 net profit of HK7.02 billion (£570.7m), but the actual loss for this year will depend on the movement of fuel prices.

“Corporate travel volumes in all classes are of concern as corporate clients begin to impose stricter travel polices on their employees,” Cathay Pacific said.

The company reported a first-half net loss of HK$663 million (£53.9m), its first since 2003, compared with a net profit of HK$2.58 bn (£209.7m) a year earlier.

But despite fears of a global recession next year, analysts said they expect Cathay Pacific to benefit from a sustained decrease in fuel prices and improved demand for passenger services to China.

UBS analyst Damien Horth said he believes Cathay Pacific’s acquisition of China-focused Hong Kong Dragon Airlines in 2006 has “materially improved the competitive position of the Hong Kong hub, relative to previous downturns”.

Austrian Airlines reports operating loss

Austrian Airlines reports operating loss

Austrian Airlines has reported a third-quarter operating loss and confirmed a gloomy outlook for the final quarter of the year.

Its net loss for the three months to September was 16.6 million euros, compared with a 29.1 million euros net profit during the same period a year ago. Analysts had predicted a significantly smaller loss of 6.2 million euros.

Chief executive Alfred Oetsch said: “The fourth quarter of the 2008 financial year will be characterised by an abrupt slump in demand, negative effects from fuel hedging and the increase in the value of the US dollar.

“The economic downturn has already led to a decline in flight bookings.”

Austrian state holding company OAG said on Monday it was extending a tender of the airline by two months.

Lufthansa issues profit warning

Lufthansa issues profit warning

Lufthansa has followed the lead of Air France-KLM by issuing a profits warning.

The German carrier lowered its 2008 operating profit outlook due to higher fuel costs and an uncertain market amid the global economic slowdown and financial crisis.

The company said it now expects operating profit for the year to come in at 1.1 billion euros (£800 million).

The profit warning comes three weeks after Lufthansa for the first time conceded that the financial crisis and cooling global economy have led to a noticeable decline in bookings, particularly from business travellers.

Commerzbank analyst Frank Skopzik said: “We’ve expected a profit warning in our estimates but are surprised how weak third quarter figures came in.”

Lufthansa said net profit for the first nine months of the year fell more than 65 per cent.