COLOGNE (dpa-AFX) - Deutsche Lufthansa AG (DLAKF, DLAKY) reported Wednesday sharply wider net loss in its first quarter with lower revenues as Covid-19 pandemic caused drastic decline in air travel. The German airline continues to expect a significant decline in fiscal 2020 adjusted EBIT. Further, the company said it expects capacity to increase from 3 percent of original planning in May to up to 40 percent in September. The shares were gaining around 3 percent in German trading.
Lufthansa, which recently accepted the German Government's 9 billion euros rescue package, said it has to take far-reaching restructuring measures to repay loans and deposits as quickly as possible amid the very slow recovery in demand.
The company plans to significantly reduce unit costs compared with pre-crisis levels. Among other things, fixed costs have been reduced by short-time working for around 87,000 employees.
As of March 31, 2020, Lufthansa's liquidity amounted to around 4.3 billion euros.
Thorsten Dirks, Member of the Executive Board Digital and Finance, said, 'In our operating business we are currently consuming around 800 million euros of our liquidity reserve per month. In addition, the reimbursement of cancelled airline tickets and the repayment of financial liabilities that have fallen due will have a foreseeable negative impact on our liquidity development.'
Further, Lufthansa said its airlines from mid-June will be significantly expanding their schedules to around 2,000 weekly connections to more than 130 destinations worldwide. The Executive Board has decided to increase the offered capacity in September by up to 40 percent of the original schedule.
The Board has also decided to increase the number of destinations to 70 percent of the original plan for long-haul flights and 90 percent for short-haul flights.
The reduction in traffic performance by over 95 percent in the months of April and May resulted in the company initially parking 700 of its 763 aircraft.
Meanwhile, the company still expects 300 aircraft parked in 2021, and 200 in 2022. Even after the end of the crisis, which is expected to end in 2023, the company sees its fleet to remain 100 aircraft smaller.
For the first quarter, net loss was 2.12 billion euros compared to a loss of 342 million euros in the prior year. Loss per share was 4.44 euros compared to a loss of 0.72 euros. Adjusted EBIT was minus 1.22 billion euros compared to minus 336 million euros last year.
First quarter Group revenue declined 18 percent to 6.44 billion euros from 7.84 billion euros a year ago. Traffic revenue fell 22 percent. The airlines in the Lufthansa Group carried 21.8 million passengers, down 26.1 percent. Seat load factor fell by 4.7 percentage points to 73.3 percent.
In the month of April, Lufthansa Group airlines recorded a 98.1 percent year-on-year decline in passenger numbers to 241,000. The seat load factor fell by 35.8 percentage points to 47.5 percent.
Passenger and freight volumes in May were again significantly lower than in the previous year.
In Germany, Lufthansa shares were trading at 9.77 euros, up 3.34 percent.
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