Lufthansa reported an operating loss of 336 million euros ($380 million) for the first quarter of the year, hurt by rising fuel costs and overcapacity in Europe, sending its shares down 5 per cent in pre-market trade.

Germany’s biggest airline said late on Monday that a 202 million euro rise in fuel costs had contributed to the loss, while unit revenues at Lufthansa’s airlines, which include SWISS and Austrian Airlines, as well as budget carrier Eurowings, fell significantly in the period.

The fall in earnings was accentuated by a tough comparison with the previous year when Lufthansa benefited from lower capacity due to the insolvency of Air Berlin, it said.

Lufthansa reported an operating profit of 52 million euros for the same period a year earlier.

Shares of the airline, which have risen around 12 per cent since the start of the month, were indicated to open 5.1 per cent lower in pre-market trade on Tuesday.

Lufthansa’s loss follows a bleak trading update from British rival EasyJet, which said on April 1 it expected to report a 275 million pound ($360 million) loss in the six months to the end of March.

European airlines are battling overcapacity and high fuel costs, while uncertainty around Brexit has led to some travellers to delay booking summer holidays.

Iceland’s WOW air was the latest casualty in March, halting operations and cancelling all future flights after failing to raise more funds.

Lufthansa said it expects revenues in constant currency terms to improve in the second quarter as booking levels recover, adding that for 2019, it still expects to make an adjusted operating profit margin of 6.5-8.0 per cent.

Lufthansa is due to publish detailed results for the first quarter on April 30.

Reuters