Lufthansa says it plans to return to dividend payments in 2010

LUFTHANSA told its shareholders it should be able to resume dividends this year due to planned cost cuts and said demand for its flights and cargo services was improving.

The German airline did not pay a 2009 dividend -- the first time it has not given its shareholders a payout since 2003 -- after posting a net loss of €148m (£127m) for the year.

It has since started a cost cutting programme targeting its passenger airlines and cargo division, and chief executive Wolfgang Mayrhuber said this would help the company pay a dividend this year.

“That [paying a full-year dividend] should work with the measures that we’ve implemented for 2010,” Mayrhuber said at the German flagship carrier’s annual general meeting yesterday.

Analysts on average expect Lufthansa to pay a 2010 dividend of €0.06. Lufthansa still aims to improve its 2010 group operating profit from last year’s €130m and targets profit in its cargo division, Mayrhuber said.

He said demand for flights and cargo services was growing as the first signs of a global economic recovery have encouraged consumers and businesses to start spending more again.