OREANDA-NEWS. Lufthansa Group posts nine-month operating profit of EUR 849 million and confirms projected full-year operating profit of EUR 1 billion • Substantial progress in reducing costs • Service companies report encouraging results • Group's member airlines' sales and distribution structures to be harmonized • Economic slowdown affects 2015 profit projections: operating profit for 2015 should be significant improvement on 2014

The Lufthansa Group remains confident of achieving its profit targets for 2014 - despite experiencing a difficult third quarter, and despite strike action eroding EUR 170 million from its earnings results. The Group expects to post an operating profit of around EUR 1 billion for the year, excluding the impact of any further strike action between now and year-end. The projection has been strengthened by favorable results for the first nine months: the Lufthansa Group achieved an operating profit of around EUR 849 million for January-to-September 2014, a EUR 186 million improvement on the same period last year. Adjusted for non-recurring restructuring and project costs, this represents an operating profit of some EUR 1 billion for the first-nine-month period. Third-quarter operating profit amounted to EUR 735 million, up EUR 145 million on the prior-year period.

"We are currently working flat out to implement our work program with its seven strategic action areas, to ensure that we remain competitive in the longer term," says Carsten Spohr, Chairman of the Executive Board & CEO of Deutsche Lufthansa AG. "Quality, efficiency and innovation are our prime focuses here. We're making huge investments in quality and service for our customers; and we're adopting new structures and innovative business models to tap into new growth opportunities and new customer groups. We're also working further on our existing business areas, continually raising their efficiency. Lufthansa has shown time and again in the past that it can respond flexibly to the markets and their dynamic evolution and emerge all the stronger from the challenges of doing so; and I'm convinced that we'll bring this strategy, too, to a successful conclusion."

The new work program unveiled by Carsten Spohr in mid-July should see the Lufthansa Group's service companies and its new business models increase their share of total group revenues to up to 40%. A key contributor here will be the new multi-platform "WINGS" concept, which should bundle the point-to-point services of the Group's passenger airlines and help tap and exploit new growth opportunities.

The Passenger Airline Group, with its quality brands of Lufthansa, SWISS, Austrian Airlines and Brussels Airlines, should see its sales and distribution structures harmonized and the amalgamation of responsibilities for global corporate key accounts. The requisite technical foundations here will be laid by early 2016, by SWISS switching its Reservations, Ticketing and Inventory operations to the same systems that are used by the Group's further member airlines. At the same time, the Group's member airlines' fare structures and classes should also be harmonized for short- and medium-haul routes. This will enable the Lufthansa Group to provide its customers with better flight and fare offers that incorporate all its member airlines' services, simultaneously reducing the internal coordination involved. Adopting and maintaining a joint overall sales and distribution strategy will also strengthen the Passenger Airline Group's position in competitive terms. Customers should feel the first benefits here as early as next year, through the substantially-enhanced combinability of member airlines' product offers.