Lufthansa Reports 44 Million Euro Quarterly Loss
Deutsche Lufthansa AG reported an operating loss of 44 million euros in the traditionally tough first three months of 2009. In the current business, year the biggest German airline was not able to live up to its record success of the previous year, due to a world-wide depression as well as the on-going poor economic climate.
Lufthansa’s business unit passenger airline group had to deal with a distinct decrease in its operating result, due to the depression and the resulting reduction of traffic revenues. Considering the prolonged reduction in demand, the capacities have been reduced further.
Logistics showed a significant slump in revenue and operating result in the first three months. To counter this development, measures such as a reduction in capacity, a cost-reduction program and short-time work at German locations are being applied. In contrast to this, Lufthansa Technik showed an increase in revenue in the first quarter.
However, due to a record date effect in inventory valuation, the company showed a lower operating result compared to the first quarter of 2009. The difficult economic conditions have caused a slump in revenue and operating result in IT services.
The business unit catering has seen a reduction in demand, but the operating result increased partly due to a one-time items completion of a judicial arbitration settlement. Lufthansa’s revenue in the first three months of 2009 was 5 billion euros, 10.3 percent less than the year before. Traffic revenue sank by 14.6 percent, to 3.8 billion. The main reason for this reduction was the lower number of passengers and the amount of freight transported.
Overall the company’s operating income went down to 5.8 billion euros, a reduction of 6.8 percent. Operating expenses decreased to 5.9 billion euros in the course of the first three months. Key to this was fuel costs of 739 million euros, equivalent to a year-on-year reduction of 31 percent, which resulted mainly from changes in price and volume.
A negative currency effect, as well as a negative result from fuel hedging had the opposite effect. The group’s operating result overall amounted to a decline of 44 million euros, which is 216 million euros less than in the same period last year. The loss can mainly be blamed on the negative developments in the unit’s passenger airline group and logistics. The company’s net profit is down 256 million euros; this time last year it was at 44 million euros.
