Lufthansa first quarter results better than expected
Lufthansa posted an improvement in first-quarter earnings on Tuesday.
Lower fuel costs offset the effects of a weak euro.
However, the German airline said that further action is necessary to cut costs.
The Cologne-based company reported a loss, before interest and tax, of 144 million euros in the first quarter, compared to a loss of 217 million euros in the first quarter of last year.
According to Bloomberg, analysts expected a loss of 201 million euros.
Revenue increased by 7.9 percent to 6.97 billion euros. Net income rose to 425 million euros, up from a loss of 252 million euros last year.
Lufthansa said that expenses for fuel dropped by 209 million euros in the quarter. It now estimates a 2015 fuel bill of 6.2 billion euros, which is slightly higher than a previous estimate of 6 billion euros.
The company wants to cut costs further to better compete with low-cost carriers in Europe and rivals from the Gulf and Turkey.
“We see positive developments in the result and in cash flow,” Chief Financial Officer Simone Menne said in the statement. “This shows we are on the right course. At the same time, we continue to see great pressure to act.” (Cash flow refers to the amount of money coming in and out of a business)
Lufthansa offering the Vereinigung Cockpit union arbitration on a set of collective agreements
The company is still handling a dispute with pilots over retirement benefits. So far pilots have staged six days of walkouts this year.
Last week Lufthansa said it expected 100 million euros in costs from these strikes.
The company announced that it offered the Vereinigung Cockpit union general arbitration of all open collective wage agreements to “avoid further strikes at the expense of our passengers.” Arbitration refers to the settling of disputes in a non-judicial (not the courts) way.
Dr. Bettina Volkens, Managing Director for Legal Affairs and Human Resources of Deutsche Lufthansa AG, said:
“We would have liked to negotiate on open issues with VC before submitting these complex issues to an arbitrator. In order to finally settle this long wage dispute, we are willing to take this step.”