Lufthansa faces more Cost-Cuts despite Profits Improvement

German airline Lufthansa, hit by a series of strikes, has warned that more cost-cutting is needed.

The carrier posted a net profit of €425m (£312m; US$472m) in the last quarter, up from a €252m loss last year, helped by the falling oil price.

But Lufthansa said rising pension and other costs remained a burden, and that pilots’ strikes had cost it €42m.

Lufthansa said the disaster this year at its Germanwings division had no impact on the parent firm’s profits.

The crash on 24 March, in which 150 passengers and crew died, had limited impact on bookings, Lufthansa said, and that insurance is expected to cover the claims brought by the families of the victims.

Lufthansa, like other national carriers, is trying to bring costs down in order to compete better with rivals from the Gulf and Turkey and low-cost carriers in Europe.

“We continue to see great pressure to act,” chief financial officer Simone Menne said in a statement. “We cannot accept the continuing increase in fees or the development of our unit costs.”

The weaker euro, down more than 11% against the dollar in the first quarter, boosted Lufthansa’s revenue, but airline was also helped by cheaper oil.

Lufthansa now estimates a 2015 fuel bill of €6bn, against an earlier estimate of €6.2bn.

Source: BBC Business