Tuesday, August 31, 2021
Passenger numbers are falling
Lufthansa and Co. expect a frosty winter
Aviation is harder hit by the Corona crisis than other industries. She was the first to plunge into the global pandemic crisis and the last to come out, says Lufthansa boss Spohr. But there is still no end in sight: after a summer high, the winter low is now looming.
According to its boss Carsten Spohr, the Lufthansa Group has not yet overcome the corona crisis. “We are preparing for another long, cold winter for us as an airline,” said the CEO on Monday evening in Frankfurt.
The competition and airport operators are likely to feel the same way. Almost 9.9 million people used the airports in Germany in the month of July, almost twice as many as in the same month last year. Compared to July 2019, the volume was only 40 percent. According to the monthly balance of the airport association ADV, passengers are particularly absent on domestic flights and the long intercontinental connections. In both areas, demand was only around a quarter of the pre-crisis level.
The most important segment remained European flights to the typical holiday destinations on the Mediterranean. Here, the number of passengers was 7.8 million, almost half (47.2 percent) of the volume from July 2019. On Monday, the ADV reported that the number of passengers had recently decreased again: in the week from 16. to 22 August, for the first time in months, fewer passengers were counted than in the previous week. The association fears that the trend this year could be similar to that of summer 2020, when passenger numbers fell sharply again after the tourist summer high.
Lufthansa is worried about long-haul flights
Although Spohr does not see the goals he has set himself for the current year in jeopardy, he is much more pessimistic than last time when it comes to opening up important long-haul flight markets. For the important North America market, he currently no longer trusts a forecast, said Spohr. At the time the half-yearly figures were presented, he had mentioned the end of September as the conservatively estimated date when vaccinated Europeans could return to the USA. China is unlikely to open until the second quarter of next year, he now estimates.
“The path to normality will take longer for us than for many others,” said Spohr, referring to the profits of many Dax companies that are already bubbling up again. Lufthansa is already happy to have reached 50 percent of the business volume again. However, the goal remains to be one of the top 5 airlines in the world and leave the crisis behind.
So far, however, the multi-airline group has not been able to keep its own announcement that it will be offering “almost all” of the destinations it offered before the pandemic in September. On Monday, Spohr named the number of 280 destinations that one would fly to again compared to around 300 destinations before the Corona crisis. The aircraft of the group brands Lufthansa, Swiss, Austrian or Brussels Airlines also fly less often and are usually less busy. For the current year, the goal of 40 percent capacity remains achievable, said Spohr.
Freight business and downsizing iron out crisis losses
The Lufthansa Cargo freight division, which will generate at least one billion euros in operating profit in the current financial year, said the CEO, remains a bright spot. For comparison: when he himself moved into the Lufthansa Executive Board ten years ago, one billion euros in operating profit was the goal for the entire group. In 2020, the freight division had already alleviated the losses of the passenger companies with a record profit of 772 million euros. Among other things, it benefited from problems with sea freight.
Spohr was optimistic about mastering the necessary downsizing. Lufthansa currently has around 110,000 employees, around 30,000 fewer than before Corona. There has also been a good response to the severance pay programs offered by the workforce at the German parent company. According to the company, around 5,000 Lufthansa employees are expected to leave in Germany. With the pilots’ union Vereinigung Cockpit, however, there is still no collective agreement beyond the spring of next year.