Lufthansa Ups 2009 Fuel Bill Estimate

Lufthansa now sees its 2009 fuel costs reaching EUR3.55 billion euros (USD$4.92 billion), more than its previous estimate of EUR3.4 billion published in April.

Rising fuel costs are a challenge for the company and the industry as a whole, slides for a presentation by Chief Financial Officer Stephan Gemkow showed Tuesday.

Lufthansa last week warned it would not be able to post a 2009 operating profit, as planned, without further cost cuts given difficult markets and a fresh rise in fuel prices.

Oil prices have risen around 70 percent since the start of the year, having advanced from a low of around USD$34 per barrel reached at the end of the 2008.

Credit rating agencies Moody's and Standard & Poor's downgraded their outlooks on Lufthansa's debt following the German flagship carrier's profit warning.

"The CreditWatch placement reflects our concerns that underlying trading conditions and prospects have deteriorated in recent months," S&P's credit analyst Leigh Bailey said late on Monday.

Lufthansa said in its presentation it does not expect the industry to recover before 2010, but said growth would continue in the long term.

Air Berlin, Germany's second-largest airline, said it is still on track to reach its full-year target of earnings before interest and tax above the year-earlier level.

Chief Financial Officer Ulf Huettmeyer said the second quarter, which ends June 30, has so far gone well for the company.