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Lufthansa confirms full-year goals

May 06 2014 10:20

Frankfurt - Lufthansa, Germany's biggest airline, said on Tuesday that it narrowed its losses in the first quarter of 2014 and is sticking to its full-year targets despite a "difficult" environment.

Lufthansa said in a statement that it ran up a net loss of €252m in the period from January to March, compared with a loss of €458m euros a year earlier.

That is slightly better than analyst forecasts.

At an underlying or operating level, earnings also improved with the first-quarter loss narrowing to €245m from €359m a year earlier.

Revenues fell by 2.5% to €6.462bn.

"The improved quarterly operating result can be largely attributed to an increase in profits at Lufthansa Technik," the statement said.

The group also introduced a revised depreciation policy for aircraft and spare engines at the beginning of the year, which had a positive effect.

"In addition, we also improved our cost structures in the passenger segment," Lufthansa explained.

"This is a sound first-quarter performance and a slight improvement in our results for the period in a difficult market environment," said chief financial officer Simone Menne.

The drop in traffic revenues was due in part to the strong euro.

But Lufthansa also trimmed the number of total flights by 1.2%, thanks to fleet modernizations and the use of larger aircraft.

Looking ahead, Lufthansa said it continues to expect full-year operating profit of €1.3bn to €1.5bn.

The projection was unchanged despite the strikes by ground staff at German airports in March and a three-day pilot strike in April, which cost Lufthansa more than €70m, it said.

"Our advance passenger bookings saw sizeable declines during the pilots' strike," said CFO Menne.

"And, with the competition we face on our European network and the strong pricing pressures on our North American routes, we haven't yet been able to raise them again.

So, despite the currently tense market environment, we are doing our utmost to recoup these earnings losses in our ongoing business," she said.

lufthansa  |  travel and leisure  |  airlines
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