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German airline Lufthansa warns of lower operating profit in 2012 amid high fuel costs

By: Juergen Baetz, The Associated Press

Posted: 03/15/2012 3:46 AM | Comments: 0 | Last Modified: 03/15/2012 9:23 AM

FILE - This Aug. 1, 2008 file photo shows German airline Lufthansa planes stand on the airfield at the airport in Munich, southern Germany. Lufthansa AG says Thursday, March 15, 2012, it expects lower profits this year as high fuel prices and economic uncertainties weigh on earnings. The company said its operating profit is expected to slide from euro 820 million (US dollar1.1 billion) in 2011 to a "mid three-figure million euro range" in 2012. (AP Photo/Uwe Lein, File)

BERLIN - German airline Deutsche Lufthansa AG on Thursday warned of lower profits this year due to high fuel prices and economic uncertainties caused by the debt crisis.

The operating profit is expected to slide from €820 million ($1.1 billion) in 2011 to a "mid three-figure million euro range" in 2012, it said.

Lufthansa noted that "the implementation of austerity plans in the overly indebted countries of the European Union raises the danger of an overall economic weakening and further receding growth in Europe."

The cautious forecast came as Lufthansa presented its full-year report, a week after announcing it posted a 2011 net loss of €13 million because of costs at its troubled British Midland International subsidiary.

Lufthansa has agreed to sell the lossmaking airline to British Airways' parent company, International Airlines Group. The deal has yet to receive regulatory approval.

Lufthansa's 2011 revenue rose 8 per cent to €28.7 billion.

Higher fuel costs and new air traffic taxes in Germany and Austria caused contribution of Lufthansa's passenger business to the company's overall 2011 operating profit to fall by 44.5 per cent from €629 million to €361 million because of .

Lufthansa subsidiary Austrian Airlines' revenue stayed flat at just more than €2 billion and it registered another full-year operating loss, this year of €62 million.

The Cologne-based company's subsidiary Swiss Air, in turn, saw revenues climb by 14 per cent to €4 billion in 2011, while operating profit fell slightly from €298 million to €259 million.

Lufthansa does not publish separate fourth-quarter figures.

The company also holds stakes in Brussels Airlines and JetBlue of the United States.

Lufthansa shares slid about 1.5 per cent to €10.36 in early trading in Germany.

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