Lufthansa Group has reported a first quarter net loss of €342 million widened from the €39 million experienced in the same period a year prior.
The group has blamed the earnings decline on an increase of €202 million in fuel costs and a deterioration in unit revenues in Europe. A continued reduction of unit costs could only partially offset the decline, the company said.
Lufthansa expects to see substantially improved trends in the rest of the year. “Overcapacities, especially on short- and medium-haul European routes, substantially depressed our first-quarter earnings,” says Ulrik Svensson, chief financial officer at Deutsche Lufthansa. “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 favorable booking levels for the months ahead.”
The network airlines of Lufthansa, SWISS and Austrian Airlines achieved an aggregate adjusted EBIT of €160 million, up from €132 million. However, the group's first-quarter unit revenues declined 5.2%, owing mainly to the difficult European market situation. The long-haul business to and from Asia and North America showed much more encouraging trends.
Eurowings continued its decline as well, posting a €257 million operating loss in the first three months of the year compared to €218 million in 2018.
Overall, the Lufthansa Group invested €1.2 billion in the first quarter of 2019, up from the €826 million experienced in the year prior, which the company has attributed to more fuel efficient aircraft.