Lufthansa warning spooks airline investors

The German airline, which carried 104m passengers across a fleet of 622 planes last year, said capacity growth from Middle Eastern carriers such as Emirates or Etihad on its US and European routes was putting pressure on fares amid the increased competition.

The business said it was lowering its operating profit forecast by as much as a third to 1bn euros for this year and by 24 per cent to 2bn euros in 2015.

The German airline’s profits downgrade knocked UK-listed airlines, putting them among the biggest fallers on the FTSE 100. EasyJet fell more than 3 per cent and International Airlines Group, which owns British Airways and Iberia, slipped almost 5 per cent.

Lufthansa first warned in May that it was facing a series of price pressures that included a pilot’s strike and currency fluctuations.

Lufthansa chief officer for finances and aviation services Simone Menne said: “The revenue risks mentioned when we presented the quarterly figures in early May have unfortunately materialised.”

The airline added it would cut its capacity during the winter.

The airline said a strike by pilots in April cost it 60m euros, while a fall in the value of the Venezuelan Bolivar when translated into euros also hit it by 60m euros, so far this year.

Last month International Airlines Group posted operating losses of 150m euros, compared with 278m euros a year earlier.