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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.
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