Business World

Wednesday 13 December 2017

Lufthansa narrows first-quarter loss as cost-cutting takes effect

Lufthansa
Lufthansa

Lufthansa, Germany's largest airline, said it was working hard in a weak market to recoup earnings lost through a series of strikes as it reported a narrower first-quarter loss on Tuesday.

Lufthansa said it reduced unit costs by 3.7pc in the quarter thanks to measures from its SCORE restructuring program, which covers everything from expansion of its low-cost carrier Germanwings to shortening turnaround times for planes at airports.

"We held our ground in a difficult market, thanks to SCORE," Chief Financial Officer Simone Menne told journalists.

For the quarter, which is traditionally loss-making for airlines, it reported an adjusted operating loss of €190m. However, that compared with estimates for a loss of €123m in a Reuters poll.

Lufthansa said pricing pressure remained high, especially in Europe and North America, and Menne said that yields - a measure of revenue per passenger - fell by 1pc on an adjusted basis.

The airline kept its target for 2014 adjusted operating profit of €1.7-1.9m, even though strikes have cost it more than 70 million in lost profit this year.

Menne said that talks with pilots, whose three-day strike last month caused the cancellation of almost 4,000 flights, were constructive but added that she could not rule out further strikes.

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