Lufthansa sees a return to full-year profits as travel resumes

0
  • Sees FY Adjusted EBIT of over €500m
  • Posts Q2 Adjusted EBIT of EUR 393 million vs. prior year loss
  • Plans to offer approximately 80% of capacity in the third quarter
  • Stocks rise more than 5%

FRANKFURT/BERLIN, Aug 4 (Reuters) – Germany’s Lufthansa (LHAG.DE) said on Thursday it expected demand for short-haul flights in Europe to drive growth for its passenger airlines this year, providing for a return to group operating profit for the full period. year, driving up its shares.

Travelers have returned to the skies following travel restrictions related to the COVID-19 pandemic in 2020 and 2021, helping airlines such as Lufthansa, Air France-KLM (AIRF.PA) and IAG, owner of British Airways, to return to profit this summer.

Lufthansa said August-December bookings now averaged 83% of pre-pandemic levels, and it hoped business travel bookings would hit 70% in the fourth quarter.

Join now for FREE unlimited access to Reuters.com

Register

Chief executive Carsten Spohr said the airline group was seeing more and more wealthy people willing to spend money on expensive hotels, rental cars, restaurants as well as plane tickets.

“These people are less sensitive to the ups and downs of the economy,” he said.

Lufthansa now expects to generate an adjusted operating profit (EBIT) of more than 500 million euros ($510 million), rebounding from last year’s loss of 2.3 billion euros.

Analysts are even more optimistic, expecting an average of 569 million euros, according to a consensus published on the Lufthansa website.

Shares of the carrier jumped more than 5% on Thursday.

INDUSTRIAL ACTION

The airline industry, particularly in Europe, has struggled to cope with the rapid rebound in demand, with huge queues at many airports due to understaffing, causing last-minute cancellations. minute and passenger frustration.

The travel chaos has led airlines to cut capacity, with Lufthansa canceling more than 2,000 flights this summer. It said it expects to deliver around 80% of pre-crisis capacity in the third quarter, less than expected, and 85-90% in 2023.

That should, however, help it improve quarterly adjusted earnings before interest and tax (EBIT) significantly from the second quarter, he said.

Lufthansa announced an adjusted EBIT of 393 million euros for the three months to June thanks to the explosion in demand for air cargo flights, compared to a loss of 827 million euros the previous year.

Its air passenger business recorded an adjusted loss before interest and tax of 86 million euros in the quarter due to costs related to flight disruptions.

Lufthansa still faces uncertainty, however, of possible walkouts by its employees. Management was in talks Thursday with ground staff, whose one-day strike last week forced the airline to cancel more than 1,000 flights.

A one-day strike costs Lufthansa 30 to 35 million euros in lost earnings.

The carrier must also speak afterwards with the pilots, who have already voted in favor of industrial action.

($1 = 0.9841 euros)

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Ilona Wissenbach; Writing by Maria Sheahan Editing by Christian Schmollinger, Mark Potter and Tomasz Janowski

Our standards: The Thomson Reuters Trust Principles.

Maria Sheahan

Thomson Reuters

Co-office manager responsible for covering Germany, Austria, Switzerland and the Balkans.

Share.

Comments are closed.