Lufthansa sees underlying earnings down again

March 15, 2012

, Frankfurt, Mar 15 – German airline Lufthansa said Thursday that underlying earnings would likely decline this year, depending on developments in fuel costs and the overall business environment.

“The Lufthansa group is anticipating an operating profit in the mid three-figure million euro range for the current financial year,” said chief executive Christoph Franz.

That would place operating profit in the region of 500 million euros ($650 million).

By comparison, operating profit in 2011 amounted to 820 million euros, a drop of 19.6 percent on the year.

All divisions would be profitable at an underlying level, “with operating profits forecast across the board,” Franz said.

“However, further developments in the business environment — and fuel prices in particular — will determine precisely how high group operating profit will be at year-end,” he added.

As reported last week, Lufthansa’s profits fell sharply last year as a result of high fuel costs, a domestic air traffic tax and losses from the sale of its British Midland unit.

At the bottom-line, Lufthansa booked net loss of 13 million euros in 2011, compared with a profit of 1.1 billion euros a year earlier, while full-year revenues were up 8.3 percent at 28.7 billion euros.

Franz said the airline was already implementing measures to boost underlying earnings by “at least 1.5 billion euros over the next three years.”

Nevertheless, “we anticipate that the financial year 2012 will again be plagued by uncertainty. The economic conditions remain difficult and volatility is still high, but we are prepared for all weathers,” Franz said.

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