Lufthansa narrows first quarter operating loss

Lufthansa narrows first quarter operating loss    German air carrier Lufthansa reported substantial improvement in first quarter operating results, reducing losses by 419 million euros or 72 percent to 116 million euros ($138 million).
   Net income returned to positive territory at 62 million euros ($74 million), up from 356 million euros in the red during the first quarter of 2003. Net income was boosted by the sale of a travel agency and the consolidation of several subsidiaries into complementary business units.
   Lufthansa attributed the results to general improvement in the global economy, especially in the United States and Asia, leading more people to travel again. First-quarter revenue was up 5 percent to 3.9 billion euros ($4.6 billion).
   Lufthansa's cargo operations posted increases, with cargo volume up 7.7 percent to 414,000 tons and revenue up 8 percent to 1.9 billion revenue ton-kilometers. The cargo load factor reached 68.9 percent, up 3.4 percent from the same period in 2003.
   The highest growth rates were in the Middle East/Africa region where the amount of cargo transported rose 17.1 percent and sales jumped 18.9 percent.
   Like other airlines, Lufthansa continued to see declines in its profit margin on cargo. Lufthansa’s average yield per shipment fell 8.5 percent on the heels of last year’s 6.1 percent decline.
   Lufthansa’s hedging strategy helped the company weather recent fuel price shocks. Lufthansa operating companies spent 339 million euro on fuel, which was only 1.5 percent more than in the first quarter of last year. Delta Air Lines, by contrast, recently reported that its year-over-year fuel bill went up 10 percent in the first quarter.
   Lufthansa said it saved 36 million euros by locking in fuel prices on commodity trades in advance.