Due to the strong demand from private travelers, Lufthansa significantly reduced its loss at the beginning of the year. The airline is now hoping for strong summer business – and assumes that ticket prices will continue to rise.
Lufthansa continues to benefit greatly from the increased demand for air travel, especially among private travelers. At the beginning of the year, the group increased its sales by 40 percent to 7.0 billion euros. In the first quarter, the airlines in the Lufthansa Group carried around 22 million passengers, around 70 percent more than a year earlier. At that time, the corona pandemic still had a significant impact on ticket demand.
Operating result above pre-corona level
Lufthansa was able to reduce the losses. The operating minus was 273 million euros – and was thus significantly better than in the previous year (minus 577 million euros). The company was also able to achieve a significantly better result than before Corona times. For comparison: In the first quarter of 2019, adjusted earnings before interest and taxes (EBIT) were minus 336 million euros.
The net loss fell by a fifth compared to the weak quarter of the previous year – but at 467 million euros it was much higher than expected on the market. Lufthansa justified this with “the usual seasonal effects”, but also with the costs of ramping up stable flight operations in summer and strikes by ground staff at airports, which led to many failures. A write-down on the sold international catering business also had a negative impact.
“Unbroken strong demand”
“After a good first quarter, in which we were able to significantly improve our results, we are now expecting a travel boom in the summer and a new record in our traffic revenue for the year as a whole,” said Lufthansa CEO Carsten Spohr according to a statement to investors. On short and medium-haul tourist routes, demand is already exceeding the 2019 level.
CFO Remco Steenbergen was also optimistic: “The consistently strong demand makes us confident for the coming months. The summer travel season will make a significant contribution to achieving our goals for 2023.” For 2023 as a whole, the Lufthansa Group continues to plan with an annual average capacity of the passenger airlines of around 85 to 90 percent compared to 2019.
Spain again the most popular holiday destination
The airline group, which in addition to Lufthansa and Eurowings in Germany also includes the subsidiaries Swiss, Austrian and Brussels Airlines, reported strong bookings in the first quarter. According to Lufthansa, the most popular holiday destination in summer is again Spain. But interest in city breaks and short breaks is also growing significantly.
At the beginning of the year, average revenues, an indicator of price development, were a fifth higher than before the Corona crisis in 2019 and are expected to continue to rise. Based on the current booking situation, the company assumes that average revenues in the second quarter will be up to 25 percent above the 2019 level.
Investors react calmly
The Lufthansa share shows little movement in early trading. On the Tradegate trading platform, the stock only rose slightly to EUR 9.69. Since the low of EUR 5.31 last summer, the stock listed in the MDAX for small and mid-caps has at times been able to more than double its price. Recently, however, the recovery rally had stalled.