German airline Lufthansa stuck to its guidance for higher profits in 2004 today after posting a narrower first-quarter operating loss as it benefited from a recovery in air traffic.
Europe's third-largest passenger airline said it made a quarterly operating loss of €116 million, after a hefty loss of €419 million last year when the SARS virus and a weak global economy sapped demand for air travel.
The result was below the consensus of analysts and together with a stubbornly high oil price, helped send shares in the company lower in early trade.
Yet Lufthansa stuck to its full-year targets to make a net profit and a significantly higher operating result, saying it was already benefiting from the general economic upturn, especially in Asia and the United States.
The carrier, which had already flagged a good start to the year, made a quarterly net profit of €62 million, up from a loss of €356 million a year ago, helped by a book gain from the sale of its stake in travel reservations firm Amadeus.
Sales rose 5.2 per cent to €3.894 billion in the three months to March, slightly under the €3.95 billion consensus.
Earlier this week, Lufthansa said passenger traffic rose 16.7 per cent in April compared to a particularly weak period last year. This followed a 13 per cent year-on-year rise in March.
Although Lufthansa has hedged 80 percent of expected 2004 fuel costs, analysts said the trend pointed to further rises in the oil price which was very negative for transport firms and was rattling investors.