Status: 10/17/2022 7:17 p.m
After two years of high losses, Lufthansa is heading towards a profit in the billions on the balance sheet for 2022. Because of the strong demand for tickets and its profitable freight subsidiary, the group raised its forecast.
After a surprisingly strong summer quarter, Lufthansa is expecting significantly better business for the year as a whole. While many pilots of the low-cost subsidiary Eurowings went on strike today and hundreds of flights were cancelled, the group board around Lufthansa boss Carsten Spohr doubled its forecast for 2022 in the afternoon. The management now has adjusted operating earnings before taxes and interest (EBIT) of more than one billion euros available if nothing unforeseen happens, as the company announced.
Spohr only raised the target to more than 500 million euros at the beginning of August. Experts recently assumed an average of a good 800 million euros. After nine months, the group is already close to the new brand with a profit of around 900 million euros.
In the black since the second quarter
According to preliminary figures, from July to the end of September Lufthansa generated sales of 10.1 billion euros, which was almost twice as much as in the corona-ridden summer of 2021. At 23.9 billion euros, sales after nine months are already well above total revenue of the previous year (16.8 billion). Adjusted operating profit was 1.1 billion euros in the three months, more than four times as high as in the same period last year. In the second quarter, the largest German airline returned to the black.
The company justified the raised forecast with strong demand for air travel, the current booking situation and another record result for the freight subsidiary Lufthansa Cargo this year. In August alone, for example, almost 5.2 million passengers flew in or out of Frankfurt Airport thanks to the great interest in tourist flights. This corresponds to an increase of 54 percent compared to the same month last year. The gap to the level before the Corona crisis has recently narrowed further and further.
The collapse of business and holiday traffic in the pandemic had pushed Lufthansa deep into the red in 2020 and 2021. The two years together, an operating loss of 7.8 billion euros. At the height of the crisis, the state had to support the group with billions in the summer of 2020. In the meantime, Lufthansa has repaid the aid in full, and the federal government has sold its stake with a profit of more than 700 million euros.
Lufthansa share at its highest level since mid-August
However, strikes weighed on the quarterly figures by around 70 million euros, according to today’s announcement. According to Lufthansa, the failures due to the one-day strike at the beginning of September alone meant economic damage of 32 million euros. The pilots had stopped work for a day to enforce their demands in the wage dispute. As a result, almost the entire program of the core airline had to be canceled.
Around 800 flights and around 130,000 passengers were affected. Lufthansa and the Vereinigung Cockpit trade union then agreed on an interim solution that includes a peace obligation until June 30, 2023. Most recently, the strike at the subsidiary Eurowings caused mass failures.
The latest news was well received on the stock exchange. The rosier prospects caused the Lufthansa share to rise by up to 4.6 percent at times. However, the profits quickly crumbled off again. At the close of trading, the paper was only up 1.57 percent and was thus only in the lower midfield of the MDAX. Nevertheless, the stock is trading at its highest level since mid-August. The airline intends to present its full quarterly figures on October 27th.