Following a weak first quarter of 2019 that resulted in an Adjusted EBIT for the period of EUR -336 million, Lufthansa expects to see substantially improved trends in the rest of the year. “Overcapacities, especially on short- and medium-haul European routes, substantially depressed our first-quarter earnings,” says Ulrik Svensson, Chief Financial Officer of Deutsche Lufthansa AG. “We are confident, though, that we will see a recovery in our unit revenues as early as the second quarter. Our confidence is based above all on our favorable booking levels for the months ahead.”
Total revenues for the Lufthansa Group for the first quarter of 2019 amounted to EUR 7.9 billion, a three-percent increase on the same period last year. First-quarter Adjusted EBIT amounted to EUR -336 million, substantially down on the EUR 52 million of the prior-year period. The key drivers of this earnings decline were a EUR 202 million increase in fuel costs and a deterioration in unit revenues in Europe. A continued reduction of unit costs could only partially offset the decline. The Adjusted EBIT margin for the period amounted to -4.3 percent (prior-year period: 0.7 percent). The Group’s net income declined to EUR -342 million (prior-year period: EUR -39 million).
The Network Airlines of Lufthansa, SWISS and Austrian Airlines achieved an aggregate Adjusted EBIT of EUR -160 million (prior-year period: EUR 132 million). Adjusted EBIT margin amounted to -3.3 percent, a six-percentage-point decline from the 2.7 percent of the prior-year period. First-quarter unit revenues (adjusted for currency movements) declined 5.2 percent, owing mainly to the difficult European market situation. The long-haul business to and from Asia and North America showed much more encouraging trends. Unit costs (adjusted for fuel and currency influences) were reduced by 0.8 percent.
First-quarter Adjusted EBIT for Eurowings declined to EUR ‑257 million (prior-year period: EUR -212 million). Unit revenues (adjusted for currency movements) were 8.5 percent below their prior-year level, owing mainly to the high pricing pressures on short-haul routes, which account for a larger portion of total revenues at Eurowings than they do at the Network Airlines. Unit costs (adjusted for fuel and currency influences) were 7.2 percent below their prior-year levels.
