Brussels Airlines (SN, Brussels National) and Eurowings (EW, Düsseldorf) are expected to announce new cost cutting measures after parent firm Lufthansa Group issued a full-year profit warning earlier this week.
The German holding had previously planned to earn EUR2.4-3 billion euros (USD2.7-3.4 billion) but has now lowered its forecast to EUR2-2.4 billion euros (USD2.3-2.7 billion) citing a challenging short-haul market among other factors.
"Yields in the European short-haul market, in particular in the Group’s home markets Germany and Austria, are affected by sustained overcapacity caused by carriers willing to accept significant losses to expand their market share. This is putting pressure on yields at the Network Airlines and Eurowings," Lufthansa Group said in an investor update, adding that the challenging situation is likely to continue at least for the remainder of 2019.
In response, Lufthansa Group expects its low-cost carrier Eurowings to further restructure its business to better adapt to the highly competitive market.
"As the progress in streamlining the Eurowings cost base is also slower than expected, the Eurowings Management has resolved upon further turnaround measures which it will present shortly," the group said.
Belgian newspaper De Tijd has further reported that the new turnaround measures are likely to also affect Brussels Airlines. The group treats the Belgian airline as a point-to-point airline aligned with Eurowings.
