The German carrier is in better financial shape than Air France-KLM and IAG.
One crisis drives out the other. In mid-February, European airlines thought they had eaten their black bread after two years of the pandemic. Ben Smith, Air France-KLM Chief Executive, summed up the general sentiment, saying in essence: “The crisis is not over yet. But our performance in the fourth quarter of 2021 makes us optimistic for the future.” The war in Ukraine is reshuffling the cards and the horizon for air carriers is darkening again. Not so much because of the airspace closure: Russia is not a major destination for airlines. On the other hand, the skyrocketing increase in oil costs is a real blow to the sector.
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Despite the hedging policy which consists of buying part of the kerosene in advance, the bill will be steep for the air carriers. Especially since this item represents up to 25% of their costs. “This year, Lufthansa anticipates a 30% increase in the price of kerosene per flight”, says an expert…
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