Lufthansa Says Terrorist Attacks Are Dragging on Bookings

European airline Deutsche Lufthansa AG warned that revenue would drop in the second half of the year and pull earnings lower as terror attacks in Europe are causing customers to scrap travel plans.

In a statement Wednesday, the Germany-based carrier said advance bookings, especially on long-haul routes to Europe, "have declined significantly, in particular due to repeated terrorist attacks in Europe and to greater political and economic uncertainty" since it made its original financial projections in March. The company said its board "regards a complete recovery as not likely anymore."

Revenue during the back half of the year will fall between 8% and 9%, Lufthansa said, after it reported preliminary revenue of €15 billion for the first half of the year, a 2.6% decline from the first six months of 2015. The company said it expects capacity growth of 5.4% for the full year, down from an earlier forecast of 6%.

In turn, Lufthansa lowered its full-year forecast for adjusted earnings before interest and taxes, saying it expects the measure to be below the previous year. It had previously expected adjusted Ebit to be "slightly above" the prior year.

The warning follows the latest major terror attack in Europe, when a man intentionally drove a heavy truck through crowds of people celebrating in Nice, France, killing scores of people, including 10 children and adolescents. The attack is just one of a spate that has put cities across the world on heightened alert to growing terror threats.

Earlier Wednesday, a new report from the European Union police agency Europol said European arrests in terrorism cases were up sharply last year, as law enforcement moved to address a shift by jihadist groups to carry out mass casualty attacks on the continent.

"The attacks in Paris in January and November 2015 represented a clear shift in the intent and capability of jihadist terrorists to inflict mass casualties on urban populations," the report said, estimating that terrorist attacks in Europe resulted in 151 fatalities in 2015, all but three in France. In 2014, Europol reported only four people were killed in terror attacks.

Major U.S. airlines that travel to Europe, including American Airlines, United and Delta, didn't immediately return requests for comment. Fellow European carrier EasyJet PLC also didn't immediately respond.

Separately Wednesday, European budget carrier Wizz Air Holdings PLC said it would cut the number of seats it planned to add to routes to and from the U.K. because of the lower pound, one of several businesses to signal that the fallout from last month's Brexit vote is affecting companies across the continent.

Write to Lisa Beilfuss at [e-mail]

(END) Dow Jones Newswires

July 20, 2016 16:05 ET (20:05 GMT)

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