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Airbus chief executive says 'crisis not over' as Lufthansa loses €1bn in three months

Airbus CEO Guillaume Faury. Photo: Regis Duvignau/Reuters
Airbus CEO Guillaume Faury. Photo: Regis Duvignau/Reuters (Regis Duvignau / reuters)

The chief executive of Airbus (AIR.PA) has warned that the “crisis is not yet over” for the aviation industry as airline Lufthansa nosedives to a €1bn (£869m, $1.2bn) loss.

Guillaume Faury’s comment came as Airbus swung to a profit of €362m in the first quarter of the year, compared with a €481m loss in the same period the year prior. It was the company’s third profitable quarter in a row and came in ahead of analysts’ estimates.

Revenues slipped 2% to €10.5bn.

The European planemaker delivered 125 commercial aircraft during the three months, a slight improvement compared to the same period in 2020.

It added that performance was also boosted by its strong net cash position, as well as positive contributions from its helicopter and defence and space activities.

Airbus said that its guidance issued in February 2021 remains unchanged. Shares rose more than 2% in Paris on the back of the news.

Airbus shares rose on Thursday on the back of the news. Chart: Yahoo Finance
Airbus shares rose on Thursday on the back of the news. Chart: Yahoo Finance (Yahoo Finance)

“Fundamental questions persist around when demand will return for the airframer,” Jack Winchester, analyst at research firm Third Bridge, said.

“First, we need to see more people taking flights, and then we need to see how airlines will think about replacing old aircraft, many of which haven’t seen many flight hours since March 2020.”

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It comes as German airline Lufthansa (LHA.DE) crashed to €1.1bn first-quarter loss as revenue fell 60%.

The company, which also includes Austrian Airlines, Swiss and Eurowings, revealed that it has cut its capacity for summer as new waves of COVID infections dent hopes of air travel reopening.

Lufthansa now expects to offer only 40% of its pre-pandemic capacity for 2021 – below the level it said is needed to generate positive cash flow.

It said it expected a gradual demand pick-up in April-June and a "significant market recovery" in the second half.

"We know that bookings shoot up wherever restrictions are loosened and travel becomes possible again," chief executive Carsten Spohr said in a statement.

Shares edged around 0.3% lower on Thursday.

READ MORE: Heathrow's pandemic losses rise to £2.4bn as airport warns travel must restart soon

Due to a sluggish vaccine rollout at the start of the year, Europe is still dealing with a third wave of COVID-19. The International Air Transport Association (IATA) forecasted that the region will be the slowest worldwide to reduce losses this year.

Meanwhile, India is currently suffering from one of the world’s worst outbreaks since the coronavirus pandemic began more than a year ago.

The variant of COVID-19 first detected in India, called the “double mutant” has already been found in several other countries, including in the UK and in America.

This could cause economies to reopen more slowly if cases of the variant spike. Scientists are currently working to understand exactly what threat the strain poses as more variants appear across the globe.

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