Lufthansa swings to a loss on fuel costs and lower fares
Deutsche Lufthansa
€6.71
13:40 24/03/23
Deutsche Lufthansa blamed high fuel costs and pressure on fares as the German airline group swung to a first-quarter loss of more than €300m (£259m).
The company posted a loss of €336m for the three months to the end of March compared with adjusted earnings before interest and tax of €52m a year earlier. Revenue rose 3% to €7.9bn.
Fuel costs increased €202m in the period and unit revenues at Lufthansa's network carriers fell 5.2% as increased capacity created stiff competition and pressure on fares. The company, which warned investors two weeks previously that results would be worse than forecast, said it expected business to improve soon.
"Overcapacities, especially on short- and medium-haul European routes, substantially depressed our first-quarter earnings," Ulrik Svensson, Lufthansa’s chief financial officer, said. "We are confident, though, that we will see a recovery in our unit revenues as early as the second quarter. Our confidence is based above all on our favourable booking levels for the months ahead."
European airlines have been affected by increased capacity in the region, pushing them to cut prices to attract customers. Ryanair cut full-year profit guidance in January, blaming too many planes flying short-haul, and EasyJet warned on higher costs in April.