Lufthansa flies into the black with pounds 45m

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The Independent Online
LUFTHANSA, the state-owned German airline, swept away five years of losses to report a return to profit at midway and make a confident statement about the rest of the year.

Pre-privatisation cost-cutting and increased revenues meant pre- tax profits for the half-year were DM105m ( pounds 45m), against a DM221m loss, slightly higher than expected.

'At the start of the year, we were talking of breaking even. With the figures we now have available for the rest of the year, the signs are that results will remain good in the second half,' Lufthansa said.

The second half traditionally brings better profits for the airline industry, and Lufthansa said if the improvements continued it would pay its first dividend since 1989.

Jurgen Weber, chief executive, felt the worst of the German recession was over and the international problem of overcapacity was easing.

Group revenues from flight operations rose 11 per cent, and passenger traffic rose 3 per cent to 17.6 million. The workforce fell 7.8 per cent to 44,000. Labour costs fell 4 per cent.

Lufthansa's sell-off should raise about DM1.7bn from the first tranche, in which the state holding is expected to fall from 51 to 38 per cent.

Saab, the Swedish car maker, announced net profit of Skr115m ( pounds 9.3m) in the first half, from a Skr697m loss last time. Saab's car sales rose 26 per cent in the period to 45,200.