German airline Lufthansa posted a bigger-than-expected first-quarter operating loss as high fuel costs, strike measures, a harsh winter and the lagging performance at some of its units weighed on earnings.
Its operating loss widened to €330 million from €44 million a year earlier, the carrier said today, publishing key first-quarter results a day ahead of schedule.
The figure was worse than the €218 million average loss estimate in a Reuters poll of analysts, but Lufthansa still confirmed its 2010 outlook.
Airlines have been hit by a toxic mixture of soaring fuel prices, increasingly price-sensitive customers and shrinking corporate and private travel budgets.
The world's airlines lost about $9.4 billion last year as customers curbed spending during the recession, and they stand to lose another $2.8 billion this year, according to the International Air Transport Association (IATA).
On top of fallout from the global economic crisis, Lufthansa took a hit of nearly €50 million from a day-long pilots' strike in February that led to about 2,000 flight cancellations and stranded thousands of travelers.
The company said recent acquisitions Austrian Airlines and bmi also dragged on first-quarter earnings.
Chief Executive Wolfgang Mayrhuber last year completed a shopping spree adding Brussels Airlines, Austrian Airlines and bmi to his stable of carriers to battle Air France-KLM and British Airways for European pole position.
Lufthansa confirmed its 2010 outlook, which calls for operating profit above 2009's €130 million, citing positive demand trends in the cargo and passenger businesses.
"We forecast that premium passenger and cargo demand will accelerate over the next quarters, therefore today's share price weakness is a very smart buying opportunity," DZ Bank analyst Robert Czerwensky said in a note.
Reuters