Demand for premium tickets
Lufthansa takes off with record profit
8/3/2023, 8:00 a.m
Lufthansa is heading towards one of the most lucrative years in its history. The company achieved record results in the second quarter. It is almost three times as high as in the same quarter last year.
Thanks to the high demand for expensive tickets, Lufthansa made a record profit in the second quarter. From April to June, adjusted operating profit of 1.1 billion euros was almost three times as high as in the same quarter of the previous year, the company said. The operating margin of 11.6 percent is a new record for a second quarter. The consolidated result also marked a new high of 881 million.
The airline group benefited from high demand, especially for premium tickets. Average yields, a gauge of ticket prices, rose 13 percent as supply was tight. Lufthansa had reduced the flight program at the beginning of the year in order to avoid a similar chaos in airport operations that customers suffered from last year.
The group specified the outlook for the year: An adjusted operating profit of more than 2.6 billion euros is expected, which is slightly above the previous analyst forecast. The Lufthansa Group expects continued high demand for flight tickets for the rest of the year. In its best year so far, 2017, the group had achieved an adjusted operating profit of almost 3 billion euros.
Market participants praise good figures
Bookings for August to December are currently more than 90 percent of the booking level of 2019, the year before the outbreak of the corona pandemic, which was devastating for air traffic. The capacity offered is expected to rise to 88 percent of the pre-crisis level in the current third quarter after 83 percent most recently. According to the company’s assessment, the specific forecast is in line with current market expectations.
A market participant at Lufthansa speaks of predominantly good figures. “The numbers are almost all above expectations, and the prospects are good,” he says. However, the free cash flow in the second quarter, at EUR 589 million, was not even half as high as expected. “Now you have to see whether this is due to investments,” said the market participant.