German airline giant Lufthansa plunged nearly 12 percent on Monday morning in the wake of Sunday's profit warning. The profit warning also weighed on the entire European aviation sector, which is in decline on a broad front.
On Sunday, Lufthansa announced that the company now expects adjusted operating profit to be between 2 and 2.4 billion euros for the full year 2019, compared with the previous forecast of 2.2 to 2.7 billion euros.
According to Lufthansa, the profit warning is due to continued overcapacity in the European market, while aggressive low-cost competitors are pressuring prices.
The news was received with horror on the Frankfurt Stock Exchange and by noon the stock had fallen by 11.7 percent.
According to Bloomberg, RBC writes in an analysis that it is ”astounded” that Lufthansa is still talking about defending market share. Morgan Stanley analysts, in turn, note that the airline's new forecast is 18 percent below consensus and that price pressure could have a greater impact on the sector and especially on low-cost carriers.
In the sector, IAG is down 2.9 percent, Air France-KLM is down 4.3 percent, Easyjet is down 5.3 percent, while Ryanair is down 6.4 percent. The Norwegian low-cost carrier Norwegian is down 3 percent, while SAS is down 1.3 percent.
Source: di.se
