Lufthansa has reported net profits fell to €226 million in the second quarter, a year-on-year drop of 70 per cent, which was partly due to a €200-million tax provision.

However, the outlook was expected to remain gloomy at least until the end of the year, the Frankfurt-based airline said in a statement to markets.

Fuel price increases, “persistent overcapacities” and “aggressive competition” from budget airlines in Europe, were taking their toll, the German flag-carrier added.

The results mirror those of Ryanair, which said earlier this week that falling ticket prices were hitting its bottom line.

Economic prospects at Lufthansa have also been hit by global issues such as the US-China trade wars and Brexit.

Lufthansa chief financial officer, Ulrik Svensson, said the group was fighting particularly hard in Germany and Austria, and planned to take on the competition by “further reducing our costs and increasing our flexibility”.

“We intend to make Eurowings a sustainably profitable airline,” he added.

The Lufthansa Group said there had been a seven per cent increase in costs, including a fuel bill that had risen by €225 million since the 2018 second quarter.

Alongside Lufthansa itself, the group includes budget subsidiary Eurowings and smaller carriers in alliances like Austrian and Swiss Air.

Despite a shrinking bottom line, the company saw sales increase by four per cent, to €9.6 billion, in the three months to the end of June, compared to the same time last year.

Lufthansa said long-haul flights, particularly to Asia and North America, continued to turn a profit.