Lufthansa Group expects continued strong demand for air travel after posting third-quarter profits of €1.5 billion, 31 per cent higher than the same period last year.
The airline giant, which also owns Austrian Airlines, Swiss, Brussels Airlines and Eurowings, on Thursday (2 November) reported an 8 per cent year-on-year increase in total revenues to €10.3 billion – the group’s strongest quarter in history in revenue terms.
Lufthansa Group CEO Carsten Spohr said: “We would like to thank our customers and the employees of the Lufthansa Group for a record summer: With the highest revenue and profit ever achieved in one summer… All airlines in our group and Lufthansa Technik contributed to this with double-digit profit margins.
“We have also made significant improvements in operational stability and regularity despite continued challenging conditions… Even though the geopolitical situation remains challenging, our booking outlook gives us reason to be positive – not only for a very good Group result this year, but also beyond,” he added.
Despite higher operating costs, all five of the group’s passenger airlines reported “significantly improved” results and double-digit third-quarter adjusted EBIT (earnings before interest and tax) margins due to the continued increase in demand, higher capacity and ongoing high yields. At 25 per cent above the 2019 Q3 levels, yields for the group reached a new record high, largely driven by premium leisure travel demand.
Combined adjusted EBIT for the group’s airlines was €1.4 billion, a 91 per cent improvement on the previous year.
Group capacity for the quarter was 13 per cent higher than 2022, reaching 88 per cent of 2019 levels. The group reported that more than 86 per cent of all seats offered during the quarter were sold.
In total, the group’s airlines welcomed more than 38 million travellers between July and September, up from 33 million in 2022, with strong demand reposted in all traffic regions.
Lufthansa German Airlines is reactivating its A380 fleet in order to expand its capacity, while Swiss and Eurowings continue to modernise their fleet, each taking delivery of an A321neo aircraft during the third quarter.
The group’s maintenance business, Lufthansa Technik, also reported record earnings, while Lufthansa Cargo reported an adjusted EBIT of €1 million, down from €331 million the previous year, due to the “challenging macroeconomic environment”.
Outlook for the group remains positive for the remainder of the year and into 2024 as demand for air travel is expected to remain strong in the coming months and Q4 capacity is expected to increase to around 91 per cent of 2019 levels. Bookings for the fourth quarter are currently up by double digits in percentage terms compared to the previous year.
Despite a recent increase in fuel costs, the group has confirmed its previous expectation of generating an adjusted EBIT more than €2.6 billion for the full year.
For 2024, the company expects a continued increase in capacity to around 95 per cent of pre-crisis levels. The adjusted EBIT margin is targeted to reach at least 8 per cent as the group expected to take delivery of some 30 new aircraft next year.