29 July 2010 Last updated at 13:28 ET

Lufthansa hurt by ash and pilots' strike

Lufthansa said there was a "noticeable recovery" in first and business class bookings

The owner of Europe's biggest airline, Lufthansa, has reported a net loss for the first half of the year after disruption from the volcanic ash cloud and from a pilots' strike.

The Lufthansa Group reported a loss of 104m euros ($136m; £87m), although this was an improvement on the 178m-euro loss it made a year ago.

Revenues rose 24% to 12.6bn euros.

The group also faced costs from the integration of new acquisitions Austrian Airlines and UK carrier BMI.

The loss was largely due to a weak first quarter, as the group said it made an operating profit of 159m euros in the April to June period.

It added that there was a "noticeable recovery" in first and business class bookings

"On the one hand, the result of the first half-year reflects a positive demand trend, above all in the freight and intercontinental passenger businesses," Lufthansa said in a statement.

"On the other, it includes adverse effects such as rising fuel prices and the first-time consolidation of Austrian Airlines and BMI, as well as non-recurring factors like the extreme winter, the strike by cockpit staff, and airspace closures in April as a result of the volcanic eruption in Iceland."

Shares in Lufthansa Group were down 45% in Thursday trade.