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Lufthansa reports loss, cuts outlook after strikes

Strikes have taken a deep bite into Lufthansa balance sheet but the airline still expects to end 2024 with an operating profit of 2.2 billion euros
Strikes have taken a deep bite into Lufthansa balance sheet but the airline still expects to end 2024 with an operating profit of 2.2 billion euros.

German airline giant Lufthansa reported a hefty first-quarter loss Monday and downgraded its 2024 outlook due to recent strikes, while warning of risks from conflict in the Middle East.

Adjusted operating losses came in at 849 million euros ($902 million), according to preliminary results.

While the start of the year is typically a quieter period for travel in Europe, the results were still far worse than a loss of 273 million euros in the same period last year.

"The loss was higher than expected due to various strikes," said Lufthansa, one of Europe's biggest airline groups, adding that the walkouts had slashed earnings by hundreds of millions of euros.

Lufthansa—whose carriers include Lufthansa, Eurowings, Austrian, Swiss and Brussels Airlines—cut the forecast for its for the whole year to 2.2 billion euros.

It had previously been expecting the figure to come in broadly the same as last year, at around 2.7 billion euros.

After two years of hefty during the pandemic, Lufthansa had racked up healthy profits in 2022 and 2023 as travel demand roared back.

But the German aviation sector faced walkouts in recent months as workers pushed for higher pay to combat inflation, with airport security staff as well as Lufthansa ground staff and staging repeated strikes.

When the company unveiled its 2023 results in March, Lufthansa personnel chief Michael Niggemann had criticized the "uncompromising strikes," saying they were "damaging our guests, the company and ultimately our employees".

But the group has in recent weeks struck deals with major staff unions, averting the immediate threat of more industrial action.

Second-quarter profits are also likely to be impacted however, and are likely to come in lower than last year due to the impacts of wage disputes on short-term demand for bookings, Lufthansa said.

Results are expected to bounce back in the second half of the year.

Lufthansa also warned that the "recent escalation of the Middle East conflict and further geopolitical uncertainties pose risks to the group's full year financial outlook".

Lufthansa has since April 6 suspended flights to and from Tehran due to soaring regional tensions.

At the weekend, it suspended flights to and from several more destinations in the Middle East following Iran's drone and missile attack on Israel.

© 2024 AFP

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