Investing.com -- Germany's Lufthansa (ETR:LHAG) has outlined plans to slash expenses in the wake of a first quarter marked by costly strike actions and flight disruptions.
The carrier vowed to reduce operating costs, halt new projects and review "the need" for additional staff in administrative areas to help bolster its core Lufthansa brand after it posted a loss in the January to March period.
Labor disputes cost the airline more than 350 million euros, an impact that Chief Financial Officer Remco Steenbergen described as "significant" in a statement.
"We cannot be satisfied with the operating result for the first quarter," Steenbergen said. "In the coming months, we will work intensively to compensate for the effects of rising costs."
Lufthansa previously unveiled a first-quarter group-wide loss of 849 million euros earlier this month, deeper than a loss of 273 million euros in the prior year. As a result, shares were mostly unchanged on Tuesday.
The company warned that its planned increase in available capacity in the second quarter will be lower than it had originally intended due to investments in operational stability and delayed aircraft deliveries. But Lufthansa said its outlook for the summer season is "very good," adding that bookings for the key travel season are 16% higher than the previous year.
"[B]roader demand remains strong and the broader picture for the industry into summer is favorable, with bookings continuing to flow in as the company ramps its network," analysts at Bernstein said in a note to clients.