Air France-KLM pops 16% after profit beat; Europe markets open higher ahead of ECB meeting

German airline group Lufthansa on Thursday reported a 39% annual decline in earnings before interest and taxes (EBIT) to 1.65 billion euros ($1.78 billion), after a year marked by staff strikes, increased global price competition and aircraft delays.

While group revenue rose 6% to 37.6 billion euros, adjusted free cash flow plunged 54%, while its operating margin narrowed to 4.4% from 7.6%.

“Pressure on operating margins remains high due to cost inflation as well as the shortage of materials and staff,” the company said.

CEO Carsten Spohr said demand for air travel remained positive, but that strikes by various employee groups and its partners, price pressures from market-wide capacity growth, high cost inflation and ongoing aircraft delivery delays had all led to a lower annual profit.

In its outlook, Lufthansa forecast a “clear increase” in revenue and adjusted earnings “significantly above” 2024, with free cash flow “roughly on par.”

— Jenni Reid

European markets are expected to open higher Thursday.

The U.K.’s FTSE 100 index is expected to open 43 points higher at 8,779, Germany’s DAX up 75 points at 23,185, France’s CAC 52 points higher at 8,249 and Italy’s FTSE MIB 307 points higher at 38,905, according to data from IG. 

Earnings also come from Siemens Healthineers, Infineon, Merck, AF-KLM, Informa, ITV and Reckitt.

— Holly Ellyatt