Lufthansa incurs €104 million first-half loss

Lufthansa A321. Photo: Rob Finlayson.

Lufthansa Group reported a first-half 2010 net loss of €104 million ($135.2 million), narrowed from a €178 million deficit in the year-ago period, but noted that it was profitable on an operating basis during the second quarter.

In a preliminary earnings statement released yesterday, LH blamed the six-month loss on a "severe winter, the strike by the pilots union (ATW Daily News, June 29)...the airspace lockdown after the volcano disruption and the continued slump in prices." It said it was able to achieve a €159 million operating profit in the second quarter owing to "the recovery in demand, particularly in cargo and intercontinental [passenger] traffic."

Lufthansa Passenger Airlines posted a €203 million operating loss for the first half while Austrian Airlines lost €70 million on an operating basis for the period. Bmi's first-half operating loss was €93 million while Germanwings reported a €39 million operating deficit. Swiss International Air Lines tallied a €54 million operating profit for the six months ended June 30. Lufthansa Cargo earned an operating profit of €144 million for the period, which LH described as "the best first-half result in its history."

Group first-half revenue increased 23.6% to €12.63 billion and operating loss was €171 million, reversed from an €8 million operating profit in the 2009 first half.

CFO Stephan Gemkow stated that "a noticeable recovery in first- and business-class bookings in the passenger business and the revenue from long-haul traffic" fueled the second-quarter operating profit. But he added, "Nevertheless, despite our delight from the very good second quarter, we have not yet succeeded in matching the results of earlier years."