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Lufthansa earnings hit by high fuel cost, overcapacity

The largest airline in Germany, Lufthansa, recorded a loss during the first three months of the year, affected by the increase in fuel costs and overcapacity in Europe.

The company said in a statement Monday evening that adjusted earnings before interest and taxes (EBIT) fell to -336 million euros (- $ 380 million), compared to 52 million euros the previous year.

Earnings were affected by an increase of 202 million euros in fuel costs, as well as a strong comparison with the previous year when the airline benefited from the loss of capacity due to the insolvency of Air Berlin, said Lufthansa.

The airline said it expected unit revenues in constant currency to increase year-on-year in the second quarter, helped by favorable reserve levels and a clear slowdown in capacity growth across the market.

For 2019, Lufthansa said it still expected to report an adjusted operating profit margin of 6.5-8.0 percent.

It was indicated that the shares of the airline would open 5.5 percent less in the operations prior to commercialization on Tuesday morning at 0535 GMT.

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