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Lufthansa reports first-quarter loss

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Lufthansa reports first-quarter loss
Photo: DPA
10:37 CEST+02:00
Germany's leading airline Lufthansa posted Thursday a first-quarter net loss of €256 million ($290 million) as the sector was slammed by the ongoing recession.

The carrier made a profit of €44 million in the same period a year earlier.

But its operating loss this time around, also €44 million, was better than expected by analysts and the airline's shares took off in early Frankfurt trading.

Lufthansa warned however that it expected a drop in 2009 sales owing to a short-term dip in demand.

Finance director Stephan Gemkow said in a statement that the group was well positioned to weather the storm.

"Now we will see who is prepared and able to react effectively against these difficult conditions. Lufthansa is a strong company and can hold its course, even in difficult times," Gemkow said.

For 2009, the airline warned of "a considerable reduction" in operating profit but the finance director said it should "maintain a significantly positive operating result, even in this environment."

The carrier benefitted from a sharp drop in fuel costs, which shed 31 percent to €739 million as the number of passengers and amount of freight carried declined.

Lufthansa had already begun taking measures to deal with the slump by trimming capacity, cutting costs and placing workers on short-time work plans subsidised by the government.

Its shares showed a solid gain of 2.46 percent to €9.58 in morning trading on the Frankfurt stock exchange, while the DAX index of leading shares was 1.99 percent higher overall.

On Monday Lufthansa shares had fallen sharply along with other airlines and tour operators on fears the outbreak of swine flu spreading worldwide would hammer its business.

Merck Finck analyst Robert Herberger told AFP Thursday that investors were encouraged by the fact that Lufthansa still expected to post an operating profit this year.

He added that analysts would listen closely during a telephone conference later in the day for updates on the swine flu impact and pending acquisitions of Austria Airlines, the British carrier bmi, and Brussels Airlines.

A week ago, Lufthansa boss Wolfgang Mayrhuber suggested the airline should use the global economic crisis to reinforce its position in Europe.

The German carrier awaits a green light from the European Commission for purchases of stakes in Brussels Airlines, and in Austrian Airlines which will provide access to a strong network of eastern European routes.

Lufthansa is also expected to raise its holding in bmi to 80 percent this year, and to launch Lufthansa Italia from Milan.

That will put it in competition with Italian carrier Alitalia for the third biggest European air transport market.

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