The head of German flag carrier Lufthansa said Japan bookings have fallen since the earthquake and tsunami in March but he hoped demand would stabilise in the second and third quarters.

Chief executive officer Christoph Franz said the situation was improving but the disaster had a serious impact on the company’s first quarter, without giving any specific numbers.

“We have seen a downturn in demand in the first weeks (after the disaster) and we are looking forward to a stabilising demand development, hopefully in the second and third quarter,” Mr Franz told a news conference in Shanghai.

“Clearly the effects on our turnover are not zero in this point in time but they are decreasing.” Lufthansa announced on Wednesday it posted a net loss of €507 million ($755 million) in the first quarter after €292 million in charges related to hedging its fuel costs.

Mr Franz said he chose to visit China on his first trip outside Germany since becoming CEO in January because it was “the most dynamic market worldwide” for the aviation industry.

“In parallel to the very dynamic development of the Chinese economy, in the first quarter of 2011 air traffic is showing a substantial further growth in this country,” he said.

He cited Lufthansa’s Star Alliance partner Air China’s forecast of double digit growth in the Chinese market.

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