Lufthansa 1Q2012 operating loss widens as crown-jewel subsidiary SWISS sinks into the red

Lufthansa Group will have to seriously score with its SCORE "Change for Success" restructuring programme to keep its position as Europe's most profitable airline group after it incurred a consolidated EUR381 million operating loss for 1Q2012. Although 1Q is a seasonally weak quarter, the loss from operating activities in the first three months of 2012 deepened 125% from the EUR169 million operating loss posted in 1Q2011. The group's net loss reduced 22% year-on-year, to EUR397 million from EUR507 million in the year-ago period, when results were negatively affected by changes in present value of hedging options.

The group had a negative operating margin of 5.6% in 1Q2012, a deterioration of 3.2 ppt compared to 1Q2011.

The worse than expected financial performance is indicative of the dire operating environment in Europe. Denmark's Cimber Sterling Group filed for bankruptcy on 3-May-2012 following on the demise of Spanair in Jan-2012 and Malevin Feb-2012.