German flagship airline Deutsche Lufthansa AG recently predicted its 2010 operating profits to increase based on second quarter gains that have gone beyond market expectations. Despite higher fuel costs, the positive forecast comes at the heels of higher demand and prices for passenger and freight traffic and cost cutting measures in the past few months.
The increase in profits are interpreted to mean that previous losses have been somewhat mitigated. The earnings are a concerted effort from the various companies under Lufthansa namely: Lufthansa Passenger Airline, the logistics unit and recently acquired Austrian Airlines.
To date, the airline's revenues have reached EUR6.9 billion while second quarter net profits are at EUR194 million. These are attributed to high demands for First and Business Class passenger bookings and from heavier long-haul traffic. These are further boosted by the EUR94 million capital gains from the transfer of 8.5% of its shares to German airport operator Fraport AG.
Analysts have estimated Lufthansa's profits to reach EUR403 million against earlier estimates of EUR198 million.