BERLIN (Reuters) – German airline Lufthansa <LHAG.DE> said its Eurowings budget carrier should be back to profitability by 2021 as it reported better-than-expected third-quarter results, helped by cost cuts.
Lufthansa said quarterly adjusted earnings before interest and taxation (EBIT) fell 8% to 1.3 billion euros ($1.44 billion), ahead of average analyst forecasts for 1.2 billion, while revenues rose 2% to 10.2 billion, also ahead of consensus.
Lufthansa has reacted to tough competition from Ryanair <RYA.I> and easyJet <EZJ.L> by cutting costs and announcing a turnaround plan in June for Eurowings, which it said on Thursday would reduce its capacity in the winter timetable.
On Thursday, it said slower growth at its competitors was helping to counter pricing pressures in Europe.
Lufthansa said the Eurowings plan was showing first results and it should achieve a margin of 7 percent in the longer term.
Chief Executive Carsten Spohr said Lufthansa would also be taking action to improve earnings at Austrian Airlines, Brussels Airlines and Lufthansa Cargo.
Lufthansa said on Wednesday that a strike by cabin crew over two days this week will result in the cancellation of 1,300 flights and affect 180,000 passengers.
(Reporting by Emma Thomasson, editing by Riham Alkousaa and Michelle Martin)