Lufthansa shares drop as earnings show passenger fares fall

Lufthansa said passenger fares are set to erode further this year as it grapples with unions over a restructuring of European operations aimed at stemming the flow of customers to discount rivals. The shares fell as much as 7.1% yesterday.

Lufthansa’s yield, a measure that reflects average ticket prices, suffered the biggest drop in at least four years in the first quarter, while airline revenue declined almost 4%.

Europe’s third-largest airline, which is seeking to build its Eurowings discount arm into a rival for low-cost leaders Ryanair and EasyJet, said the intensity of competition and price pressure shows no sign of easing.