Thu. Jul 18th, 2019

Lufthansa enters losses in the first quarter due to fuel costs

Lufthansa enters losses in the first quarter due to fuel costs



The group of airlines Lufthansa has entered losses in the first quarter of the year due to the increase in fuel costs and excess capacity in Europe, which reduce margins.

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Lufthansa reported today that it had an operating loss before extraordinary of 336 million euros, compared to the benefit of 52 million euros a year earlier, according to provisional figures.

Lufthansa shares fell 3% to 21.63 euros after the opening of the Frankfurt Stock Exchange and after the losses were announced.

The result was influenced by an increase in fuel costs of 202 million euros and the excess capacity in Europe, which creates a strong pressure on prices and reduces unit revenues on short and medium-haul flights.

In turn, the first quarter of 2018 was characterized by the fall in capacity following the insolvency of Air Berlin.

Lufthansa unit revenues in Frankfurt, Munich, regional airlines, SWISS, Edelweiss Air and Austrian Airlines fell by 5.2% in the first quarter of this year.

The drop in unit revenue in Eurowings was 8.5% because most of its flights are short or medium-haul.

Lufthansa in Frankfurt, Munich, regional airlines, SWISS, Edelweiss Air and Austrian Airlines had a loss in the first quarter of 160 million euros, compared to the profit of 128 million euros a year earlier.

Eurowings has suffered in the first quarter a loss of 257 million euros compared to 212 million euros a year earlier.

The cargo transport subsidiary reduced operating profit by 67%, to 24 million euros, due to the drop in freight transport, especially between Europe and Asia.

Lufthansa Technik had a profit of 125 million euros (107 million euros a year before)

The billing rose in the first quarter by 3%, to 7,900 million euros.

The Lufthansa group expects an increase in unit revenue in the second quarter due to the fact that reserves in the second quarter are good.

Therefore, it maintains the forecasts for the entire year.

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