Lufthansa Q2 profit falls on fuel costs, taxes

Germany's Lufthansa airline sees Q2 net profit slide 24 percent on high fuel costs, taxes

Associated Press

BERLIN (AP) -- German airline Lufthansa blamed high fuel costs and new taxes on air travel in its home and Austrian markets for a 24 percent decline in second-quarter earnings.

Deutsche Lufthansa AG said Thursday that net earnings fell to €229 million ($270 million) from €301 million a year earlier. Revenue grew by 6 percent to €7.9 billion and the number of passengers between April and June rose slightly to 27.5 million.

The Lufthansa group includes Austrian Airlines and Swiss. The Cologne-based company also holds stakes in Brussels Airlines and JetBlue of the United States.

The earnings were bolstered by progress in restructuring ailing Austrian Airlines, which churned out an operating profit of €26 million in the first half of the year. That compared with a loss of €64 million a year earlier. Lufthansa did not disclose quarterly figures for the unit.

The results beat the consensus expectation for net profit of €153 million among analysts surveyed by FactSet, and the company's shares rose by some 3 percent in early Frankfurt trading to €10.61.

However, Lufthansa reaffirmed its cautious 2012 outlook, saying the group "expects a revenue increase and an operating profit in the mid three-digit million area."

Lufthansa's second-quarter performance followed a net loss of €397 million in the first three months of the year, also blamed on high fuel prices.

Lufthansa announced in May that it will shed 3,500 office jobs over the coming years to cut costs and boost lagging profits.

The cuts are part of a cost-reduction program that started at the beginning of the year and aims to improve the company's operating profit by €1.5 billion compared to 2011 by the end of 2014.

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