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Prices, extreme winter and strike burden Lufthansa Q1 result

The Lufthansa Group has posted an operating loss of €330 million for the first three months of 2010; the figure is €286 million less than during the same period the previous year.

After a crisis-related decline in demand in 2009, combined with a major slump in prices, the passenger airline group and Logistics business segment were able to significantly improve traffic performance in the traditionally weak first quarter. However, the slump in prices continues to place a burden on the result of the passenger airline group.

An extreme winter, as well as the strike and the threat of further industrial action by the pilots’ union, Vereinigung Cockpit, led to additional revenue losses and follow-up costs. Lufthansa Group posted a net loss of €298 million for the first quarter of 2010; the figure had stood at €-267 million for the same period a year earlier.

During the first three months of 2010, the Lufthansa Group generated revenues totaling €5.8 billion, equivalent to a year-on-year increase of 14.8%. The traffic revenue rose by 20% to €4.6 billion. During the reporting period, the group’s operating income increased by altogether 10.2% to €6.4 billion.

Operating expenses rose by 14.8% to €6.7 billion during the first quarter of the year. This was mainly due to the higher fuel costs which rose by €330 million; equivalent to a year-on-year increase of 44.7%, which was both price and volume related. The fees and charges were 28.7% above the previous year’s figure.

Lufthansa's capital expenditure during the reporting period totaled €534 million, of which €477 million were spent on the expansion and modernization of the fleet. Operating cash flow totaled €564 million, the free cash flow (operating cash flow minus net investments) stood at €278 million. At the close of the first quarter, the group’s net indebtedness stood at €2.3 billion. The group’s equity ratio increased to 24.2% as a result of Amadeus IT Holding S.A. going public, the related sale of shares in the company and the revaluation of the stake held by the Lufthansa Group. (BBJ Online)