Lufthansa profits boosted by lower fuel costs

German airline group Lufthansa has reported a 55% rise in underlying earnings to €1.8bn (£1.4bn), helped by lower fuel costs.

The increase comes despite a series of strikes by pilots and cabin crew over changes to working conditions,

Lufthansa said it would resume dividend payments to shareholders and forecast slightly higher profits in 2016.

But it warned that competition from rivals would continue to put pressure on ticket prices.

Lufthansa chief executive Carsten Spohr said that 2015 had been an "emotionally challenging year" following the Germanwings air crash, which killed 144 passengers and six crew members.

'On the right track'

Mr Spohr said lower fuel costs and efforts to reduce costs and the number of empty seats on flights had paid off.

The airline is restructuring to compete with low-cost airlines across Europe and what it calls "government-subsidised" Gulf airlines.

"The result also confirms that our focus on quality in both the premium and the point-to-point segment is the right approach and... further affirm that the Lufthansa group is on the right track," Mr Spohr added.

Lufthansa resumed dividend payments of €0.50 per share for 2015 after halting them in 2014.

The airline group's net profit rose to €1.7bn from €55m a year earlier, while revenues were 6.8% higher at €32.1bn.

Mr Spohr said he expected underlying earnings to "increase slightly." However, the earnings forecast did not include the possible impact of strikes.

The airline is continuing to struggle to reach agreement with staff on a new pay and pension deal. Last year it was hit by strikes by both pilots and cabin crew, which cost Lufthansa €231m in lost earnings.

Liberum analyst Gerald Khoo said: "We remain concerned the group is struggling to deal with multiple strategic challenges, with cheaper fuel masking the problems in the short term."

Shares in Lufthansa were 5.23% lower at €14.48.

As well as the Lufthansa brand, the group owns Swiss and Austrian Airlines and low-cost carriers Eurowings and Germanwings.