Lufthansa’s shares slumped on Wednesday after the German airline said it would not reach its profit targets this year and next.
It blamed competition – particularly from state-owned Gulf-based carriers – for pushing down prices on its main European and US routes.
It now expects operating profit this year of 1.0 billion euros, against a previous forecast of between 1.3 and 1.5 billion. It also reduced its 2015 earnings target to 2.0 billion euros from 2.65 billion.
Lufthansa, which is Europe’s largest carrier in terms of revenue, revealed pilot strikes in early April had wiped 60 million euros off this year’s profit. It said bookings have only recently started to recover.
In addition, currency restrictions in Venezuela preventing airlines from repatriating revenues from ticket sales there had lowered results by a further 60 million euros.