Lufthansa Group Adjusts Financial Outlook After Q1 Losses Due to Strikes

Lufthansa Group reports a significant Q1 loss and revises its full-year financial outlook, citing strikes and operational challenges as major contributing factors.

Lufthansa Group Adjusts Financial Outlook After Q1 Losses Due to Strikes

The Lufthansa Group has faced significant financial challenges in the first quarter of 2024, resulting in an adjusted EBIT loss of EUR 849 million, a substantial increase from the EUR 273 million loss reported in the same period last year. The Group attributes the deeper losses primarily to several strikes by various employee groups within the organization and at system partners, which adversely affected earnings by approximately EUR 350 million.

Despite these setbacks, the Group reported a positive adjusted free cash flow of EUR 305 million, bolstered by strong inflows from advance ticket payments. However, the outlook for the second quarter remains subdued, with anticipated additional impacts of around EUR 100 million due to the residual effects of recently settled wage disputes, particularly at Lufthansa Airlines, and ongoing issues at Austrian Airlines. These factors are expected to depress short-term travel booking demand.

The Group also faces challenges with the ramp-up of capacity, which is projected to be slightly lower than initially planned. This adjustment aims to enhance punctuality for customers but is further complicated by delays in new aircraft deliveries. Despite these issues, booking levels for the upcoming summer holiday months remain robust, aligning with the Group's original expectations and supporting a more optimistic forecast for the second half of the year.

For the full year, Lufthansa now anticipates an adjusted EBIT of around EUR 2.2 billion, down from the previous expectation of maintaining earnings comparable to the EUR 2,682 million reported last year. The adjusted free cash flow expectation has also been revised downward from at least EUR 1.5 billion to at least EUR 1 billion.

Additional uncertainties such as the recent escalation in the Middle East conflict and other geopolitical tensions continue to pose risks to the Group’s financial outlook for the remainder of the year.

Lufthansa Group plans to provide more detailed financial updates and clarify its outlook when it publishes its finalized first quarter results on April 30.