Lufthansa's M&A appetite curbs quarterly profit growth

Lufthansa reported slower than expected profit growth in the first three months of the year, held back by costs of expanding its Eurowings budget carrier amid a wave of consolidation among Europe's short-haul airlines. Lufthansa has been at the forefront of a frenzy of M&A activity, snapping up Brussels Airlines and parts of insolvent Air Berlin last year to spread its wings in the competitive budget market. While the collapse of Air Berlin has driven more passengers to its brands, Lufthansa said Thursday one-off costs from digesting its former competitor had pushed Eurowings to an adjusted loss of E203m in the three months to the end of March. CFO Ulrik Svensson said Air Berlin's insolvency was a "once in a lifetime opportunity to consolidate the German market", but said upgrading Air Berlin's fleet had kept some planes in hangars and would lead to further one-off expenses in coming months. Lufthansa has its eye on further consolidation and has submitted what it called a "concept paper" to Italian authorities setting out its idea for a new Alitalia with fewer planes and staff. Svensson said the company would only pursue the struggling Italian airline if it were restructured. <br/>