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Lufthansa hits Q1 turbulence from rising fuel costs


SHARES in Lufthansa tumbled as markets opened on Tuesday before rebounding, after Europe's largest airline group blamed a steep first- quarter operating loss on rising fuel prices.

After dropping almost 5 per cent when the market opened, Lufthansa stock was down around 0.7 per cent by 10.20am in Frankfurt (0810 GMT), trading at 21.93 euros (S$33.56).

Late on Monday the Frankfurt-based group had issued preliminary first-quarter results, revealing an adjusted operating loss of 336 million euros. In the same period in 2018, the European airline giant had posted a positive bottom line of 52 million euros.

But increased competition in Europe and a higher fuel bill bit into the opening months of 2019. Lufthansa said its fuel costs were 202 million euros higher year-on-year, while sales increased 3 per cent to 7.9 billion euros. The group spent 6.1 billion euros on fuel last year, 850 million euros more than in 2017 - and costs are set to rise another 650 million this year.

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Lufthansa recalled that in its 2018 annual report, it had already warned that "earnings for the first quarter of 2019 were likely to be down" from the previous year. AFP

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