German airline Lufthansa AG has warned of an "unexpectedly" deep first quarter operating loss due to a sharp fall in passenger traffic and introduced short-time working for thousands of staff.
"The continuing weak economic environment, especially in Germany, the impact of the Iraq war and the unforeseeable consequences of the SARS respiratory disease are exacting a sustained toll on business," Lufthansa said in a statement.
Lufthansa spokesman Mr Thomas Ellerbeck described the situation as "dramatic" but declined to comment on how much the short-time working would save or provide any details on the first quarter. He said the airline could not say when things might improve.
"Now is not the time for reliable forecasts," he said. Lufthansa said German ground staff in its passenger business - including head office staff - would have their work week cut by 1.5 hours to 36 hours from April 15th.
It had also decided to introduce short-time working for cabin crew and expected to start talks shortly with pilots on ways to contain the crisis, which it said was more acute than the post-September 11th industry downturn.
The two-year slump has sent several airlines into bankruptcy and sparked worldwide cuts in service and jobs.
Lufthansa said it had made adjustments to its flight schedules but further details were not immediately available.
Yesterday the company's shares extended earlier losses to close 6.2 per cent weaker at €8.53 euros, underperforming the DAX index, which lost 1.5 per cent weaker.