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Lufthansa Cuts 2019 Outlook

German airline Deutsche Lufthansa (DLAKF,DLAKY) said Sunday that it cut its outlook for the fiscal year 2019 due to intense competition from low-cost carriers in Europe.

The Group will also make a provision for a tax risk in an amount of 340 million euros in the first half year of 2019 due to the Supreme Tax Court changed the case law established in prior years, Lufthansa said in a statement.

The company now expects to reach adjusted EBIT margin of between 5.5 to 6.5 per cent in 2019, compared to an earlier projection of 6.5 to 8.0 per cent. The revision corresponds to Group adjusted EBIT of between 2.0 billion euros to 2.4 billion euros in 2019.

It now expects fiscal year 2019 group revenue growth in the low-single-digit range, compared to the prior expectation of the mid single-digit growth range.

Network Airlines are now anticipated to reach an Adjusted EBIT margin between 7 and 9 percent in 2019. For Eurowings, the Group projects an Adjusted EBIT margin between -4 and -6 percent.

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