Lufthansa reported a first-quarter loss because of rising fuel costs, sending the stock plunging in a sign of deepening industry woes after the German airline cut its growth plans last month.
The shares fell 5 percent in premarket activity on Tradegate after the country’s biggest carrier disclosed late Monday an adjusted loss before interest and taxes of $380 million (336 million euros). The downturn, which compared with earnings of $59 million (52 million euros) a year earlier, was particularly stark because of strong results for the beginning of last year following the collapse of Air Berlin, Lufthansa said in a statement late Monday.
The loss comes after Lufthansa opted to pare planned capacity increases this summer to bolster fare prices and focus on profitability. The European airline industry is coming off a tough year, with bad weather and air traffic control strikes among the factors hurting profit. Irish low-cost giant Ryanair has warned that depressed fares will continue for the rest of the year.
Lufthansa’s fuel bill rose by $228 million (202 million euros) in the first quarter, in line with a company forecast. The full-year rise is expected to be $735 million (650 million euros), the airline said in a presentation last month.
The carrier still expects to report annual adjusted EBIT margin of between 6.5 percent and 8 percent, the carrier said. Revenue for each passenger flown a mile will increase this quarter from a year earlier, Lufthansa said, citing favorable bookings and slowing capacity growth across the industry. The company will publish detailed first-quarter results on April 30.
The stock has gained 12 percent this year, valuing the carrier at 10.5 billion euros.
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Photo Credit: Lufthansa. Bloomberg.