graphic
News > International
Lufthansa cuts forecast
June 13, 2001: 4:54 a.m. ET

German airline cuts earnings forecast to pay for pilots' strike and wage rises
graphic
graphic graphic
graphic
LONDON (CNN) - Lufthansa said on Wednesday it was cutting its earnings forecast for 2001 to cover the cost of a strike by pilots and pay rises they won.

Europe's biggest airline and German flag carrier said it expects to post an operating profit of between graphic700 million and graphic750 million ($595 million and $637 million). That compares with an earlier forecast of graphic1 billion.

The company said the pay settlement would add graphic125 million to it expenses on top of the graphic75 million from the three strikes in May, that crippled its schedules and stranded tens of thousands of passengers.

The pilots were seeking an average wage increase of as much as 35 percent on the company's top pilot's wage of 350,000 deutsche marks ($158,000). The starting salary for a pilot is 100,000 marks and the captain of the airline's flagship Boeing 747 can expect to earn over 350,000 marks.

The pilots wanted compensation for low pay increases during the early 1990s when the airline's finances were stretched

The pilots agreed to a hefty pay increase, up as much as 30 percent, last Friday after seven rounds of talks between Lufthansa's 2,400 pilots and the airline came to naught the two sides went into mediation led by former German foreign minister Hans-Dietrich Genscher.

Lufthansa also said it expects a "downturn in the world economy and air traffic restrictions" to depress earnings by graphic50 million to graphic100 million.

The company said last month it made a first-quarter loss of graphic94 million compared with a net profit of graphic5 million in the same period a year ago.

It blamed soaring fuel prices, which rose 43.1 percent, or graphic121 million, to graphic402 million, and Internet investments for the loss.

Shares in Lufthansa (FLHA) fell 3.8 percent to graphic20.45 in Frankfurt morning trade. graphic





graphic

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.