European aviation giant Lufthansa Group reported higher than expected quarterly earnings on Thursday (31 October). The company expects that a recent increase in corporate travel demand will continue into the fourth quarter, even as US government spending has declined due to the ongoing government shutdown.
The group, which includes Lufthansa, Austrian Airlines, Brussels Airlines, Swiss and ITA Airways, reported an operating profit of €1.33 billion between July and September, marking a 1 per cent decline compared to the same period last year.
Group-wide revenues, however, increased 4 per cent year on year to €11.2 billion and the company confirmed it is “on course” to achieve its full-year forecast of “significant earnings growth” in 2025.
Lufthansa Group chairman and CEO Carsten Spohr said corporate sales had “accelerated in the last few months”, with demand growth largely driven by the tech, consulting and finance industries.
“It’s not crazy growth but compared to what we’ve seen for quite a few years, it’s worth mentioning,” he said during an earnings call on Thursday.
Spohr stated that, aside from the recent US government shutdown, there has been steady corporate demand from the US, noting that the US Government is the group’s largest corporate customer. He also mentioned that corporate demand from Germany is experiencing some growth.
Spohr added that the Trump administration’s ‘Liberation Day’ tariff announcement in April caused a drop in European demand for US flights in Q3, but did not affect US outbound demand.
Overall revenue for the group’s airline brands during the third quarter increased 1 per cent to €8.9 billion, with an operating profit of €1.2 billion – which it said was a “solid achievement” given the market environment in the quarter.
Revenue per available seat kilometre for the quarter fell by 2.2 per cent year on year due to the “highly competitive environment” in continental Europe and an expected temporary slowdown in North Atlantic demand, Lufthansa said.
Cost cutting measures at its flagship airline Lufthansa Airlines also contributed “tangible” results, with the carrier reporting an improved operating result despite a “challenging trading environment”.
The group said advance bookings for the fourth quarter indicate “a more stable demand environment” for all regions, with load factor currently on par with the previous year.