Lufthansa notches first Q1 profit in nine years

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Lufthansa posted its first opening quarter operating profit since 2008, as revenues climbed more than 11 per cent and freight traffic rose.

The German airline group, which also includes Austrian Airlines, Swiss, Brussels Airlines and Eurowings, posted €16m in earnings before interest and taxes, versus a €49m loss the year before. Adjusted EBIT was €25m, versus analysts’ forecasts for a loss of €45m.

Revenues were up 11.2 per cent to €7.7bn, ahead of estimates at €7.2bn.

Ulrik Svensson, chief financial officer, said the numbers showed the company was on a successful track thanks to “significantly higher traffic revenues” and a positive pricing environment.

Passenger traffic rose 13 per cent and cargo sales were up 8.3 per cent. Nearly 5 percentage points of the passenger traffic increase reflects the incorporation of revenue from Brussels Airlines, which it acquired in December.

“For a period that is traditionally difficult for the airline industry, we have posted our first positive earnings result since 2008,” Mr Svensson said.

“This is mainly attributable to favourable trends at Lufthansa Cargo and strong growth at Lufthansa Technik. This demonstrates the strength of our broad setup as aviation group.”

He said cost control would continue to be a priority. In the quarter, non-fuel constant currency unit costs at the Group’s airlines rose by 1.4 per cent.

Mr Svensson said the airline’s 2017 guidance was unchanged, as “we do not yet have a sufficient visibility on the bookings in the important third quarter.”

Lufthansa shares have gained nearly 36 per cent this year, with the airline settling a pay dispute with its pilots and posting better-than-expected figures for 2016.

Shares dropped 2 per cent in early morning trading.

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