Lufthansa first-quarter net loss widens as fuel costs weigh

Group halts planned capacity expansion in low-cost Eurowings business

Lufthansa  is abandoning plans to increase capacity at Eurowings by 2%  this year

Lufthansa is abandoning plans to increase capacity at Eurowings by 2% this year

 

Lufthansa halted capacity expansion at its Eurowings low-cost arm after the group’s first-quarter margins were squeezed by rising fuel bills and overcapacity that’s sparked a Europe-wide fare war.

Europe’s biggest airline is abandoning plans to increase capacity at Eurowings by 2 per cent this year.

Earlier this month Lufthansa issued a profit warning that attributed a plunge in earnings before interest and tax on fuel prices, cheap airline tickets and tough comparisons with year-earlier figures.

And on Tuesday the carrier reported a net loss of €342 million for the first three months of the year.

“We are confident, though, that we will see a recovery in our unit revenues as early as the second quarter,” chief financial officer Ulrik Svensson said in a statement.

For 2019, the group still expects to make an adjusted operating profit margin of between 6.5 and 8 per cent.

Lufthansa dropped 3.1 per cent in Frankfurt trading. – Reuters/Bloomberg