Lufthansa made an adjusted loss of E336m before interest and tax in the first three months of 2019, confirming its profit warning a fortnight ago. The carrier blamed “overcapacities, intensive competition and correspondingly high pricing pressure on short-haul routes”. Fares on its network carriers — Lufthansa, Swiss and Austrian — fell 5%, adjusted for constant currency. In the same quarter last year, it made an adjusted profit of E52m before interest and tax. The group had revenue of E7.9b for the quarter, up 3% on last year and also in line with its warning. The group’s fuel bill rose E202m as hedging failed to shave off much of the increase in the jet fuel price, as well as unfavourable foreign exchange movements. It said its fuel bill in 2019 would now increase by E600m, compared with previous guidance of E550m. Results for the low-cost Eurowings airline were also poor, with fares down 7% on the previous year, however the carrier did manage to cut unit costs excluding fuel at constant currency by 5.9%.<br/>
star
Lufthansa said the proportion of non-Germans among its investors rose to 41.7%, putting aviation licences at risk if the rate exceeds 50%, but the German carrier stopped short of buying back shares as a countermeasure. "The company does not believe that there is any immediate danger of an increase of non-German shareholdings which would endanger the company's ability to meet the requirements for retaining its licenses, rights and prerogatives under aviation law," Germany's largest airline said Tuesday. "It currently does not intend to exercise its right to buy back its own shares." The rate of non-German shareholders stood at 29.5% in April.<br/>
South African Airways is moving closer to an agreement with lenders to extend 9.2b rand ($642m) of debt, a deal that would buy the unprofitable state airline more time to restore its battered finances. An agreement has been reached “in principle” to roll over the borrowings, “but of course there are certain conditions that need to come through,” CEO Vuyani Jarana said at the CAPA aviation conference in Dubai on Tuesday. “It’s an ongoing conversation.” An agreement with lenders would ease SAA’s dependence on the National Treasury, which allocated 5b rand to the carrier last year to help it meet debt payments. Finance Minister Tito Mboweni has made clear the government is reluctant to approve a further outlay, saying in November he favors shutting down the company. Jarana was hired in late 2017 to lead a turnaround of SAA after years of mismanagement and corruption scandals. One of his plans is to transfer four unwanted Boeing aircraft from the main airline to low-cost carrier Mango, which has the scope to increase capacity, he said. “There’s more growth in the low-cost services in the domestic market, which makes Mango very critical for SAA,” he said. SAA is also looking to hire an adviser to help sell the state-owned airline’s catering business, Jarana said, a move that would raise capital and rid the carrier of less important assets.<br/>
Scandinavian Airlines says it will cancel another 504 flight departures across the Nordic region on Wednesday, affecting about 47,000 passengers, due to a pilots' strike. The cancellation comes on top of 546 flights cancelled Tuesday and hundreds more since pilots began an open-ended strike on Friday due to the collapse of pay negotiations. CEO Rickard Gustafson says the pilots' demands "entail significant cost increases for SAS that would threaten the company's long-term competitiveness and consequently, the jobs of all SAS employees." Gustafson said Tuesday the airline was "prepared ... to find a solution" in the talks on a new collective bargaining agreement. Those talks, he said, are in "a deadlock."<br/>
Austrian Airlines reported a 2019 Q1 net loss of E99m, widened from a E73m loss in the year-ago quarter. The company cited higher fuel and maintenance costs, as well as intense competition at its hub at Vienna International Airport, for the loss. During the quarter, strong competition resulted in an 4% year-over-year (YOY) total revenue to E382m. “The first quarter shows a mixed picture. We are happy about the passenger increase of 180,000 additional passengers, but we have effects on the cost and earnings side,” CFO Wolfgang Jani told ATW in Montreal on the sidelines of the carrier’s first flight from Vienna to the Canadian city. Q1 expenses were up 3% YOY to E502m, based on higher fuel and maintenance costs.<br/>