CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Lufthansa sees profit improvement but more cost cutting expected

Article By: ,  Financial Analyst
May 5, 2015 1:26 PM

Along with other European airlines, Lufthansa has reported improved first-quarter earnings. However, cheaper fuel has played a part in the company’s positive financial results – and further action will be needed to lower costs.

This is especially true since the company is facing a rising pension burden and staff-related costs, Reuters reports.

The German airline is currently in a dispute with pilots over retirement benefits and the expanding of low-cost services. Talks to resolve these issues were suspended following the Germanwings plane crash on March 24th.

Luftansa’s first quarter was overshadowed by the crash in France that killed all 150 passengers on board. Evidence suggests the co-pilot deliberately locked the captain out of the cockpit and steered the Germanwings plane into a mountainside.

The terrible events had an affect on bookings for the airline – a low-cost subsidiary of Lufthansa – for a short time. However, Lufthansa chief financial officer Simone Menne said there was no impact on the company’s finances, as claims and other costs are being handled by insurers.

Other airlines are have also seen improvements in the first quarter.

Ryanair, for example, has seen a 16 per cent rise in April passenger numbers. After undertaking cost-cutting measures, IAG – the parent company of British Airways and Iberia – has reported a profit during the period which is usually seen as a loss-making time of year.

Lufthansa has confirmed a target of 1.5 billion euros (£1 billion) for adjusted earnings before interest and tax, and they say the figure is unlikely to be exceeded significantly.

“We continue to see great pressure to act,” Ms Menne said in a statement.

The company says that unit costs rose 2.8 per cent in the quarter. Yields, which provide a measure of ticket prices, dropped 2.9 per cent before excluding currency effects. The euro, which has weakened more than 11 per cent against the dollar meant that Lufthansa’s revenue was boosted for the first quarter, but it also meant that the benefit of cheap oil was not as strong. The company estimates its 2015 fuel bill to be 6.2 billion euros.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024