Lufthansa announces 2005 forecast

Airline Industry Information, March 24, 2005

AIRLINE INDUSTRY INFORMATION-(C)1997-2005 M2 COMMUNICATIONS LTD

German airline Deutsche Lufthansa issued on Wednesday (23 March) a forecast for its performance in 2005.

According to the forecast, 2005 operating profit will remain flat because of high fuel prices. The carrier's fuel costs are expected to rise 22% to EUR2.2bn in 2005. In 2004 Lufthansa's fuel costs grew by 35% to EUR1.8bn despite hedging which reduced the total by EUR232m.

The carrier announced a 2005 cost-savings target of EUR402m, adding that it saved EUR378m in 2004. The airline's phased takeover of Swiss International Air Lines, to begin this year, would cost EUR62m in charges in 2005, said the company's chief financial officer.

Lufthansa has also announced an operating profit of EUR383m and net profit of EUR404m for 2004, which does not differ much from preliminary results posted earlier in March, and proposed a dividend of EUR0.30.

In addition, Lufthansa said that its board of directors had reappointed CEO Wolfgang Mayrhuber for another five years until 2010.

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