Lufthansa loss widens for quarter

Deutsche Lufthansa AG said Tuesday its net loss widened in the first three months of the year due to higher fuel costs, strikes and bad weather, but the German flagship airline reiterated that it expects operating profit to rise in 2010. Lufthansa posted a first-quarter net loss of €298 million ($393 million), compared with a year-earlier loss of €267 million, even though revenue rose to €5.8 billion from €5 billion. The first-time consolidation of unprofitable Austrian Airlines and British Midland Airways, or bmi, helped Lufthansa increase first-quarter revenue but weighed on the company's operating profitability. The carrier's operating loss reached €330 million, compared with a €44 million loss a year earlier. "Overall performance to date has further strengthened the executive board's expectations of achieving a positive operating result higher than last year's." Lufthansa said. Despite the wider net loss and operating results.

Lufthansa said its first quarter also reflects "positive demand trends in the cargo and passenger business." The forecast for a higher operating result comes despite the volcanic-ash cloud that grounded much of European air traffic for nearly a week last month. Lufthansa Chief Executive Wolfgang Mayrhuber has estimated the shutdown cost the airline about €200 million. Irish flag carrier Aer Lingus PLC, meanwhile, said it halved its operating loss in the first quarter, as lower fuel and staff costs more than offset a drop in revenue. But the beleaguered airline faced another hit to revenue as a new volcanic-ash cloud forced the temporary closure of Irish airports on Tuesday.

The company reported an operating loss of €37.8 million, compared with a €74.8 million loss a year earlier, even though revenue fell 1.8% because of weak consumer confidence and capacity cuts. Aer Lingus Chief Executive Christophe Mueller, who took up the post last September, said he was "very encouraged" by the first-quarter trading, but added that it's "appropriate to remain cautious on the full year 2010 performance.

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