Bullish comments from Lufthansa AG’s (ETR:LHA) CEO sent the company’s stock higher on Tuesday.
The comments from CEO Carsten Spohr came during an industry event in Mexico on Monday.
“From an outlook perspective we are getting more optimistic every week regarding our demand situation, especially from the U.S. and from Asia,” said Spohr at the conference.
Spohr’s comments drove the stock up 2.7% in the first two hours of trading in Frankfur. The stock is currently trading at €18.23 per share. Year-to-date, the stock has gained 48%.
According to Spohr, Lufthansa does not have an interest in buying Alitalia. But Europe’s second largest carrier may consider expanding into Italy if the outcome of its bankruptcy process is favorable.
Lufthansa May Consider Alitalia Purchase
Spohr said if Alitalia planes are made available for sale, Lufthansa would consider purchasing and may increase its capacity through its Eurowings unit.
“Eurowings is a pan-European model. If there’s opportunities to bring Eurowings into Italy… that could be one option,” said Spohr.
The carrier expects underlying earnings (before interest and tax) to come in slightly lower than last year’s earnings of 1.75 billion euros.
Spohr said the “guidance is as it is,” hinting that the carrier would not be upgrading its profit outlook.
In 2016, European airlines reported a decline in demand from Asian travelers after a string of attacks hit Paris, Nice and Brussels. Traffic started recovering this year, but airlines fear the recent attacks in Britain may deter travelers again.
Japan Airlines Co. Chairman Masaru Onishi said demand for flights from Japan to Europe remain slow due to the threat of terrorism.
Lufthansa’s stock is also helped by news that the plan to induct the carrier as a strategic partner in NAC (Nepal Airlines Corporation) has moved forward.
Through the partnership, the NAC and its chosen partner company would share gross profits. There is also the possibility that the partnership is extendable for an additional ten years.