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Lufthansa better able to cope with headwinds; AVIATION.

German airline Lufthansa yesterday stuck to its 2008 goal to match last year's operating result despite a series of headwinds after boosting first-half earnings by 45 per cent.

Operating profit rose to 705 million euros in the period, Lufthansa said, in line with the average of forecasts in a poll of 17 analysts of 707 million euros.

"This reflects the altogether stable operating performance," and a contribution from its Swiss subsidiary of 157 million euros, Lufthansa said in a statement.

First-half sales rose to 12.1 billion euros from 10.1 billion euros. Net profit dropped to 402 million euros from 992 million euros a year ago, when earnings were boosted by a gain from the sale of its stake in tourism business Thomas Cook.

Lufthansa's decision to stick to its full-year goal to match last year's operating result of 1.38 billion euros contrasts with more gloomy comments from rival carriers of late.

Europe's top low-cost carrier, Ryanair, warned on Monday it might make its first loss since 1989 as it cuts fares to buoy demand amid soaring fuel costs and the threat of recession.

US airlines, including United Airlines parent UAL, US Airways and JetBlue Airways, in which Lufthansa holds 19 per cent, have all reported second-quarter losses, citing soaring fuel costs.

But Lufthansa, Europe's second biggest airline, said it still faced a number of challenges for the rest of the year, including pay disputes with ground and cabin crew and regional pilots that have led to walk-outs.

"Risks lie in a renewed and lasting increase in fuel prices, a sustained decline in the world economy and in the as yet unforeseeable effects of the strike actions in the course of ongoing wage negotiations," Lufthansa said.
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Title Annotation:Business
Publication:The Birmingham Post (England)
Date:Jul 30, 2008
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