Price deterioration in Europe caused by market-wide overcapacities and aggressively growing low cost competitors are putting pressure on yields in the European short-haul market. Lufthansa Group adjusts its full year financial outlook as a result. Network Airlines are now expected to reach an Adjusted EBIT1 margin between 7 and 9 percent in 2019. For Eurowings, the Group projects an Adjusted EBIT margin between -4 and -6 percent. Based on the expectation of low-single-digit Group revenue growth, the Group’s Adjusted EBIT margin is forecasted to reach 5.5 to 6.5 percent, resulting in Group Adjusted EBIT amounting to between EUR 2.0 and 2.4 billion in 2019.
In its financial accounts for the first half year of 2019, the Group will also make a provision for a tax risk in an amount of EUR 340 million because the Supreme Tax Court changed the case law established in prior years.
1 Adjusted EBITis not a financial term according to IFRS. Information regarding the calculation of the Adjusted EBIT can be found in the Annual Report 2018 of Deutsche Lufthansa AG.