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Lufthansa: War extends crisis
MUNICH, Germany (Reuters) -- German airline Lufthansa AG on Thursday repeated its forecast for lower 2003 earnings and said the war in Iraq would extend the crisis plaguing the airline industry since the September 2001 attacks on the United States. "Our assessment after September 11 has been proven right: the crisis will not be overcome within one year," Chief Executive Juergen Weber told a news conference. "The end is not in sight and it will be extended through the war that started in the middle of the night," he said, adding Lufthansa was likely to ground more airplanes. Following the U.S. strikes on Baghdad overnight, Lufthansa said it was cancelling flights for two days to Tel Aviv, Amman and Kuwait in the face of a U.S-led attack on Iraq. The airline said further decisions depended on how the situation in the Middle East developed. The airline reiterated 2003 earnings would not match those of last year but said the uncertain geopolitical situation and sluggish economy made it impossible to give a firm forecast for the year.
The airline said net debt in 2002 had fallen to 1.1 billion euros ($1.17 billion) from 3.8 billion and cash flow increased 33.2 percent to 2.3 billion euros. Earnings per share came in at 1.88 euros compared to a loss per share of 1.66 euros the year before. On Wednesday the airline said its 2002 operating profits rose strongly to 718 million euros, but the result implied a fourth quarter operating loss wider than most analysts had expected. Lufthansa said traffic revenue in 2002 fell 1.8 percent to 12 billion euros. Total revenue, the airline said previously, came in at 17 billion euros. Lufthansa shares rose despite the gloomy outlook, with traders saying it was a rare example of financial strength among its competitors. The stock stood 2.9 percent up at 8.90 euros at 0954 GMT.
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