Deutsche Lufthansa was hit by the crisis in the banking industry as it lost a fuel hedging contract with Lehman Brothers after the U.S. investment bank filed for bankruptcy protection in September. The German flagship carrier's fuel hedging rate for the rest of this year fell, and its earnings were weighed down by the lost contract, Lufthansa said in a statement on Wednesday. Airlines use hedging to protect themselves against sharp rises in jet fuel costs, one of their biggest expenses. Lufthansa's fuel costs in the first nine months rose 48.9 percent from the year-earlier period. Lufthansa's earnings and outlook were not only hurt by the Lehman contract. Current sentiment in the aviation industry was characterised by uncertainty over what impact the financial market crisis would have on the real economy. The German flagship airline said it expected demand for passenger air travel to be subdued for the rest of the year.

To help offset the impact of falling passenger numbers, the carrier said it would further reduce the number of flights it offers. "Lufthansa should have reduced capacities earlier in Q3 and focused much more on unit cost reductions," said UniCredit analyst Uwe Weinreich after the company released third-quarter results and cut its full-year operating profit target.