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Lufthansa back in the black in Q1

Xinhua, April 27, 2017 Adjust font size:

Lufthansa Group on Thursday published its first quarterly report of 2017 presenting a positive development, dampened by an increased costs outlook.

Lufthansa operated at a profit of 25 million euros (27 million U.S. dollars) in the first quarter of 2017 compared to a loss of 53 million euros for the same period last year. The company's earnings returned to the black for the first time since 2008 in what Lufthansa Chief Financial Officer Ulrik Svensson called a "traditionally difficult first quarter for the airline industry."

Group revenue increased by 11.2 percent to 7.7 billion euros.

Passenger numbers increased by 13 percent and freight sales by 8.3 percent, increasing traffic revenue by 10.9 percent to 5.8 billion euros. This is also due to the integration of the Brussels Airline recently taken over by Lufthansa and higher passenger volume for Lufthansa Group's Eurowings. However, Lufthansa, Swiss and Austrian Airlines are in the red, operating at a loss of 40 million euros; the point-to-point airlines Eurowings and Brussels increased their deficit by 7 percent to 132 million euros.

The improved overall operating results can be largely attributed to positive development at two of Lufthansa's divisions, Lufthansa Cargo and Lufthansa Technik. The logistics branch generated a profit of 33 million euros in the first quarter, compared to a loss of 19 million in 2016. The maintenance and service division Lufthansa Technik increased its quarterly profit by over 50 percent to 137 million euros.

Despite the positive development presented in the report, Svensson did not adjust upwards their forecast for 2017 upward. An estimated increase in fuel costs, of around 500 million euros, totaling 5.4 billion euros and uncertainty concerning the bookings for the "important third quarter," will lead to, as expected, a continued decrease of the operative profits.

The news was not well received on the financial market. Lufthansa shares went down by 4.2 percent, ranking among the biggest fallers on the DAX. Enditem