Lufthansa Sees Losses Following a Difficult Year

The well known airline, Lufthansa has just slipped into a €112 million loss for 2009. This news comes as the airline continues to struggle with cut capacity in the face of falling demand. The loss for the airline is being compared to the net profit of €542 million for the financial year of 2008.

Europe’s largest airline by sales also confirmed that its operating profits fell by 90 percent to just €130 million. This is down from €1.3 billion in 2008. In response to this news, the executive board has proposed not to distribute a dividend for the financial year of 2009.

Despite the very difficult year, the airline did note that there has been some successes. Lufthansa increased its third quarter earnings following the inclusion of acquisitions, Austrian Airlines and British Midland, in the results. Lufthansa also owns or holds stakes in other airlines as well. These other airlines include Swiss International Airlines, Brussels Airlines, and JetBlue.

Following this announcement, Lufthase rose 3.6 percent to €11.50 in Frankfurt trading. This is the biggest gain since August 21st. So far in 2010, however, stock has fallen back down by 2.1 percent.

Lufthansa has outlined its plans to reduce annual costs by € 1billion by the end of 2011, as well as a 20 percent reduction in its workforce. Officials at Vereinignug Cockpit, which is the pilots trade union, called off a planned four day strike after just 24 hours, which is also being used as good news for the airline. The union has agreed to resume talks with the airline following the walkout. It is not known yet if an agreement can be reached, but both sides would like to work something out.