Shares in Lufthansa fell 6% Tuesday after the German airline group dialled back on its growth plans because of “significant pricing pressures”.<br/>Lufthansa said it expected to increase capacity — based on the number of passenger jets it flies, and their frequency — by 6% this year, down from a previous forecast of 6.6%. The weaker outlook came alongside mixed Q1 results. Lufthansa swung to a net loss of E8m for the three months to March 30, compared with a E425m profit a year earlier, when it was boosted by the sale of its stake in JetBlue, the US carrier. On an underlying basis Lufthansa lost E53m in Q1, a better result than analysts had expected. However, investors were jittery partly because International Airlines Group, parent of British Airways, said on Friday that it had “moderated” its capacity growth for 2016 because of weaker demand following the Brussels terrorist attacks. Lufthansa shares are down more than 10% this year as it struggles to cut costs and battle competition from budget airlines in Europe, and Gulf carriers on medium and long-haul routes. Q1 figures, it said, were further hampered by “weak economies” in South America and fewer group travel tickets purchased by Chinese and Japanese customers. “The intensity of the competition and the resulting pricing pressures will not ease, not least because of the low fuel costs,” said Simone Menne, Lufthansa’s finance director. “This is why it is important that we continue to work consistently on our cost positions. We remain fully committed to our goal of reducing our unit costs this year net of fuel and currency impacts.” The group said that cargo was “bracing . . . for a challenging financial year” from overcapacity on transatlantic routes and low demand. It projected that underlying operating profit at the unit would be “significantly” below last year. Analysts were generally upbeat about the Q1 figures, however, given the momentum in Lufthansa’s efforts to contain costs.<br/>
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San Francisco city leaders have approved a $3.45m settlement from Asiana Airlines involving a fiery 2013 airport crash that killed three people and injured nearly 200 others. The city attorney had called the proposed settlement the final chapter in the tragedy caused when Asiana Flight 214 clipped a seawall on an approach to San Francisco International Airport and burst into flames on the runway. The vote Tuesday by the Board of Supervisors was unanimous and without comment. About $1.2m of the settlement will go toward the city’s legal costs and another $1.6m to the airport for damages stemming from the crash. The settlement also calls for Asiana to compensate San Francisco’s aviation insurer. Representatives of the South Korean airliner did not provide immediate comment.<br/>
THAI has opted not to postpone the delivery of a fleet of 12 A350s, the latest generation of airliner from Airbus, as considered earlier. The flag carrier seems more optimistic about its improving financial status and business outlook, the results of a painstaking rehabilitation, which obviates the need for a delay in taking delivery of the aircraft, said senior THAI executives. That means THAI is committed to receive the first two twin-engine A350s over the next two months or so and five each next year and in 2018, all under the originally agreed upon time frames. It remains unclear whether a contractual binding with the European aeroplane maker played a part in THAI's move to stick to the delivery schedule. The State Enterprises Policy Commission advocated THAI delay taking delivery of 14 new wide-body aircraft over the next three years to relieve some financial burdens weighing on the company's turnaround plan.<br/>
Avianca Holdings, one of Latin America’s largest airline operators, said it has negotiated a “significant reduction” in aircraft deliveries from 2016-2019 with Airbus. Last May, Avianca firmed up an order for 100 A320neo family aircraft, the largest single aircraft order ever placed by a Latin American airline. The order brought to 133 the number of A320neo family aircraft Avianca has on order. In addition to Colombian flag carrier Avianca, Avianca Holdings also controls San Salvador-based TACA, Costa Rica’s LACSA, Taca Peru, Guatemala’s Aviateca, Ecuador’s Aerogal, Avianca Brazil, Taca de Honduras and Avianca Cargo. Avianca did not say exactly how many aircraft deliveries had been changed or whether it has deferred or canceled Airbus aircraft on order. An Avianca spokesperson did not respond to a query. In a brief filing with the US Securities and Exchange Commission, the company said the agreement reached with Airbus is “directed towards enhancing profitability, achieving a leaner capital structure as well as reducing the current levels of debt.”<br/>