Lufthansa Group is maintaining its full-year earnings forecast after reducing its operating losses for the first quarter, despite a decline in revenues.
But the company warnings that this outlook does not take into account the possibility of further strike effects.
Its adjusted EBIT loss for the three months to 31 March fell by more than two-thirds to €53 million ($61 million).
Revenues slipped slightly to €6.9 billion as a result of “significant pricing pressure” within the group’s passenger airlines, says chief financial officer Simone Menne.
But it has achieved “substantial” unit-cost cuts, she adds, which have “more than made up” for the decline.
Lufthansa’s passenger airline division improved its adjusted EBIT by €244 million and that for Austrian Airlines was up by €23 million.
Currency effects, however, dragged on the result at Swiss International Air Lines, where adjusted earnings fell by €28 million.
Lufthansa Group is keeping its full-year expectation constant, forecasting an adjusted EBIT which is “slightly above” the previous year’s €1.8 billion.
But it says: “This forecast does not, however, include the negative result impacts of possible strike actions."
It adds that it "does not expect" to see any easing of pricing pressures in the passenger and cargo transport sectors.
Lufthansa envisions continuing pressure from the weak Latin American economies and adds that Chinese and Japanese traffic data shows lower booking volumes, although the primary markets of Europe and North America are “more stable”, the company says.
Although the first quarter is typically a weak period, the company is flagging a 4% reduction in unit costs, outside of fuel and currency.
Lufthansa Group turned in a net loss of €8 million, compared with a €425 million profit last year, but stresses that this included a large benefit from transactions relating to US carrier JetBlue Airways. Taking this into account, it says, the first quarter net result equates to an improvement of €70 million.
Source: Cirium Dashboard
