Lufthansa Sees Net Loss Increase
%mlink(STRY:; PHOTO:; AUDIO:%)
FRANKFURT, Germany (AP) _ German airline Lufthansa said Wednesday that its net losses almost doubled in the first three months of the year compared with the same period last year, citing expenses from the acquisition of travel services provider Thomas Cook and caterer Sky Chefs.
The airline’s net loss widened to 186 million euros ($169 million), from 94 million euros in the same quarter the year before.
But earnings from operations _ which excluded financial items such as interest and taxes and adjustments caused by the acquisitions _ rose to 47 million euros ($43 million) from 24 million the year before.
Passenger traffic fell to 9.7 million from 10.9 million the year before, Lufthansa said. ``The consequences of last Septembers terror attacks plus the slack overall economic climate continued to dampen the development of the group’s passenger activities,″ the company said in a statement.
But the airline said it was able to boost its operating income through rigorous cost controls. The company has idled planes and slashed marginal routes to match diminished demand for seats.
``This successful performance was the result of our prompt and resolute response to the events of Sept. 11,″ the statement said.
Operating earnings present an incomplete picture of a company’s finances, but many analysts look to them as a clue to the state of the company’s core business.
The company’s bottom line was hit by 226 million euros ($206 million) in losses from financial items, including accounting adjustments related to the 2000 purchase of Thomas Cook. Thomas Cook was taken over by C and N, Lufthansa’s travel services joint venture with retailer KarstadtQuelle. The joint venture then took the Cook name.
Earnings were also weighed down by interest costs, which rose 44 percent to 126 million euros ($115 million) due to increased debt. Some of that came from the first-time inclusion of LSG Sky Chefs USA on its balance sheet, the company statement said.
Lufthansa bought U.S.-based Sky Chefs in 2000 and the integration of the two companies was completed in the first quarter of 2002.
For all of 2001, the airline lost 633 million euros ($560 million) for all of 2001.