Lufthansa Group faces a cash crunch within weeks as it battles to survive the coronavirus crisis.
The giant German airline organisation, whose interests include Austrian Airlines, Brussels Airlines and Swiss, issued the warning as it was reported to be seeking €10 billion in state aid.
Lufthansa revealed a first quarter loss of €1.2 billion against a deficit of €366 million in the same period last year.
And it warned that “crisis-related asset impairments and the negative development of the value of fuel hedges” to have a further “significant negative impact” on group profit in the quarter.
“The travel restrictions implemented as a consequence of the global spread of the coronavirus had a significant impact on the Lufthansa Group’s earnings development in the first quarter of 2020,” the company said.
March revenues alone fell by 47% or almost €1.4 billion year-on-year.
“Cost reductions could only partially offset the revenue decline in the quarter,” Lufthansa admitted.
It said: “At present, it is not possible to foresee when the group airlines will be able to resume flight operations beyond the current repatriation flight schedule.
“The group therefore expects a considerably higher operating loss in the second quarter compared to the first quarter.
“Available liquidity currently amounts to around €4.4 billion. Financing measures totalling around €900 million since mid-March have helped strengthen liquidity. In particular, bilateral credit lines were drawn down and short-term loans were taken out.
“However, in view of the business outlook, existing multi-billion liabilities related to trade payables and refunds of cancelled tickets as well as upcoming repayments of financial liabilities, the group expects a significant decline in liquidity in the coming weeks.”
And Lufthansa warned: “The group does not expect to be able to cover the resulting capital requirements with further borrowings on the market.
“The group is therefore in intensive negotiations with the governments of its home countries regarding various financing instruments to sustainably secure the group’s solvency in the near future.
“The management board is confident that the talks will lead to a successful conclusion.”
Details of a quarterly financial statement originally due to be published on April 30 have been postponed until the second half of May.