Airline Lufthansa believes the industry is facing the 'greatest economic crisis ever' with the combined effect of a weak world economy, the after-effects of the Iraq war and the SARS disease.

Speaking after posting a first-quarter loss of EUR415, chief executive, Juergen Weber, said strict cost discipline and higher productivity would remain at the core of Lufthansa's success: 'If we want to remain a healthy company and keep our staff on board, we have to further reduce our costs in cooperation with our internal and external partners.'

The German airline said its sales fell 4.6 per cent in the first three months of the year. But Weber stressed there would come a time after the crisis when it was vital to be well prepared to keep ahead of its competitors: 'Cost saving is important, but cost-saving alone is not the future. At the same time we must invest in our products for tomorrow if we want to keep a competitive edge.'

In the light of the first-quarter results, Weber said he no longer expected Lufthansa to finish the year with positive operating figures.

For the first three months, it reported a net loss of EUR365m, against a loss of EUR186m euros the previous year. Its operating loss was EUR415, against a profit of EUR12m the year before.

The company still remains upbeat, however. 'Thanks to our financial strength we will be able to maintain the position we have achieved,' stressed Weber, 'even if the crisis proves to be protracted.' Details: www.lufthansa.com