Lufthansa Issues Profit Warning as Fuel Costs Hit Results

Lufthansa has added to worries about the European aviation sector with a profit warning, two weeks after low-cost carrier easyJet spooked the market, the Financial Times reported. In an after-hours statement on Monday, the group said that rising fuel costs would send it to a worse than expected first-quarter loss, prompting its shares to drop 4.4 per cent in early trading on Tuesday. They recovered to trade flat by mid-morning. Lufthansa will now report a loss of €336m in adjusted earnings before interest and tax for the first three months of 2019, a swing from a profit of €52m in the same period a year earlier. Median consensus predicted a loss of €186m. The group blamed a €202m rise in fuel costs, as well as overcapacity in the fragmented and highly competitive European airline market, which is driving fares down. It said unit revenues at its legacy airlines — Lufthansa, Swiss and Austrian — and its low-cost Eurowings carrier “were down significantly”. Read more