German flagship carrier Lufthansa said cost cuts and robust demand for air travel could still offset the impact of political unrest in North Africa and the crisis in Japan this year
"The current challenges disrupt the course of business, but do not imperil the fundamental development of the company," Lufthansa said in its quarterly financial report today as it confirmed its full-year outlook.
Lufthansa has said these events would weigh on its outlook and impacted results by €40 million in the first quarter.
Still, it reported a narrower than expected quarterly operating loss of €227 million late yesterday.
Like its peers around the world, Lufthansa is seeking ways to cut costs as fierce competition and soaring oil prices squeeze margins, for instance with fuel price hedging or by installing slimmer, lighter seats on its planes to reduce their weight.
It said it still sees 2011 revenue and operating profit rising but could not not be more specific due to the uncertainty surrounding events in Japan and North Africa.
Analysts on average see Lufthansa posting an 11 per cent gain in full-year revenue and a 29 per cent jump in operating profit.
Global airlines body Iata expects air travel markets to remain depressed this quarter after growth in international air passenger traffic slowed in March.
Lufthansa said its sales in the Asia-Pacific region are currently growing despite the situation in Japan. It is still feeling the pinch of unrest in the Middle East/Africa region, though.
Reuters