Loss prompts Lufthansa to consider sale of non-core units

Lufthansa (LH, Frankfurt Int’l) posted a EUR1.2 billion euro (USD1.35 billion) loss for the first quarter of 2020, prompting it to consider selling non-core business units. The group, belatedly announcing its first-quarter results on June 3 due to the coronavirus pandemic, said the travel restrictions imposed due to the global spread of the coronavirus hit its earnings hard, with group revenue in the first quarter falling by 18% to EUR6.4 billion (USD7.2 billion) compared with EUR7.8 billion (USD8.8 billion) for the previous year. This saw a first-quarter loss before interest and taxation (EBIT) of EUR1.2 billion compared with EUR336 million (USD379 million) for the same period last year. Lufthansa said crisis-related asset impairments and fuel hedges contributed to first-quarter losses, including EUR266 million (USD300 million) impairment charges on decommissioned aircraft, and EUR157 million (USD177 million) on the goodwill of LSG North America and Eurowings (EW, Düsseldorf Int’l). Fuel hedging cost the group EUR950 million (USD1.07 billion) during the first three months of the year. To reduce costs, the Lufthansa Group said around 87,000 employees are working shorter hours; planned projects and maintenance events are being cancelled, and restructuring programmes at Austrian Airlines (OS, Vienna) and Brussels Airlines (SN, Brussels National) are being further intensified.