Lufthansa has reported a 3.6% fall in profits last year to €1.75 billion including €100 million in strike costs.

This came as sales declined by 1.2% to €31.7 billion over 2015.

However, the German airline group said profits before strike costs were actually in line with the previous year.

Lufthansa expects its profit to fall slightly below €1.75 billion this year due to pressure on ticket prices and an increasing fuel bill.

Its fuel bill is expected to increase by about €350 million this year to €5.2 billion.

But efforts to reduce costs would not be enough to offset the rising fuel bill and pressure on ticket prices.

Chief executive, Carsten Spohr, said: “In a very demanding market environment we successfully kept the Lufthansa Group’s margins at their record prior-year levels, through consistent capacity and steering measures and, above all, through our effective cost reductions.

“Based on this good financial development, all our business segments developed positively in their respective markets.

“And by expanding our commercial joint ventures for the network airlines, fully acquiring Brussels Airlines and concluding the comprehensive wet-lease agreement with Air Berlin we have also strengthened our strategic position.”

He added: “In 2017 it remains necessary to further reduce our costs.

“This is the only way to meet and master the decline in unit revenues and the higher fuel expenses, and at the same time to maintain and strengthen our financial stability and our investment capacities.

“We will consistently continue to modernise the Lufthansa Group. We aim to be the first choice – for our customers, our employees, our shareholders and our partners.

“To achieve this, we will continue to focus on cost discipline, so we can create possibilities for profitable growth in the future.”