Lufthansa has forecast stable margins and revenue growth in the mid-single digits this year as it eyes cautious expansion in the busy summer months, manages costs and targets break even at its budget airline Eurowings. 

Germany's biggest airline, reporting an 11% decline in fourth-quarter operating profits, said it would focus on "quality" growth this year and reduce growth in its peak summer capacity to 1.9%. 

"Nonetheless, group revenue should rise in the mid-single-digit percentage area," Lufthansa said today.

Cost savings would compensate for €650m in extra fuel costs expected this year, the airline added. 

Lufthansa's acquisition of Air Berlin removed a key competitor on its home market, but the cost of integrating the operation has hurt profitability and its share price, which has declined by 12% over the past 12 months.

It said its earnings before interest and tax (EBIT) fell by 11% to €378m in the seasonally-quiet fourth quarter, just below a mean forecast of €397m in a poll of analysts. 

For 2018 as a whole, Lufthansa's EBIT margin declined to 7.9% from 8.3%. 

The company, which employs more than 135,000 people, forecast a margin of between 6.5-8% in 2019. 

At Eurowings, which took over large parts of Air Berlin's aircraft fleet, management is targeting breakeven in 2019 "and with that a significant improvement compared to a year earlier", Lufthansa said.