Carried 22 million passengers
Lufthansa increases demand even before the summer boom
05/03/2023 10:53 am
The holiday season has not even started yet, but the Lufthansa Group is already reporting significantly more passengers. The expected seasonal loss is correspondingly lower. One division, however, causes concern.
Thanks to strong demand from private travelers and high ticket prices, Lufthansa is able to put the losses of the Corona crisis further behind. With a 40 percent increase in sales to seven billion euros, the usual seasonal operating loss in the first quarter was halved to 273 million euros. “The Lufthansa Group is back on track,” said CEO Carsten Spohr.
After the good first quarter, Lufthansa expects a travel boom in the summer and a record traffic revenue for the year as a whole with strong bookings. Ticket sales were almost a fifth above the pre-crisis level. While the operating result was in line with analyst expectations raised by Lufthansa, the net loss fell less than expected compared to the same quarter last year, which was still dampened by the pandemic. Despite 22 million passengers, seven million more than a year ago, the group made a bottom line loss of 467 million euros, only 20 percent less than in the same period last year.
Lufthansa explained that this was due to the costs of preparing for stable flight operations in the summer and stress caused by strikes by airport ground staff. A write-down on the sold international catering business LSG also had a negative impact.
Cargo business suffers after pandemic boom
While the passenger airlines, which in addition to Lufthansa and Eurowings also include the domestic subsidiaries Swiss, Austrian and Brussels Airlines, halved the billions lost in the previous year, the freight subsidiary Lufthansa Cargo no longer earned so lavishly. Freight rates fell after the special boom in the pandemic years with the disrupted shipping traffic, which is why the operating result fell from half a billion euros to a good 150 million euros. “The consistently strong demand makes us confident for the coming months,” said CFO Remco Steenbergen.
Average yields, an indicator of price development, are expected to be 25 percent above the pre-crisis level in the second quarter. If there is still a shortage of flights, Lufthansa can therefore push through higher prices, especially in the expensive booking classes, especially on transatlantic routes. In the current quarter, the airline group expects an operating profit above the level of the pre-crisis quarter of 2019. At that time, the group had achieved an operating result of 754 million euros.
However, capacity should not yet reach the pre-crisis level in the seasonally strongest quarter from July to September. The outlook for the year as a whole remained unchanged: operating profit is expected to increase significantly for 85 to 90 percent of the pre-crisis capacity of passenger airlines.