Lufthansa Predicts a Summer Travel Increase After the Loss Recorded in Q1

Lufthansa Group has said that it will surpass its pre-Covid performance in the second half of the year despite the fact that capacity is still significantly lower than 2019 levels.

This is due to the strong demand for travel following the Covid scandal.

The airline group reported a loss on 3 May for its weak seasonally first quarter, citing "high booking flows" in the first few months 2023. This was particularly true of the private travel segment. Business travel had more ground to recover.

Notably, while capacity is expected to be at 82% pre-Covid in the second quarter of this year, yields will be up 25%, after being up 19% during the first three month of the year.

The group says that this is due to the "catch up effects" of the pandemic on passenger demand.

"After a good first quarter in which we were able to significantly improve our result, we now expect a travel boom in the summer as well as a new record in our traffic revenue for the year as a whole," says Lufthansa Group chief executive Carsten Spohr. "On short- and medium-haul leisure-oriented routes, demand is already exceeding 2019 levels."

The first-quarter revenue of EUR7.7 billion was up by 40% on the previous year, but down around EUR800 millions from 2019.

The EBIT loss for the group of EUR304m in January-March was a halving from its loss in 2022 and broadly comparable to its performance during 2019. The group's net loss of EUR467m was an improvement over the EUR584m in 2022 but down from the EUR342m in 2019.

The results show that the cargo and passenger segments of the airline business have experienced different fortunes, reflecting trends elsewhere in the industry.

A loss in EBIT of EUR531m during the weaker first quarter of the year was half of the 2022 deficit for Lufthansa passenger airlines.

The "normalisation" of the cargo sector in the first quarter, which has seen the boom from the Covid era moderate on global markets, weighed down the group's results. Lufthansa Cargo achieved a positive EBIT in the first quarter of EUR149, compared to EUR481 millions in 2022.

Swiss was the lone carrier in the passenger segment to have a positive EBIT of EUR77million. Other carriers reported losses of EUR381 millions, EUR73 millions for Austrian, EUR44 million for Brussels Airlines, and EUR104 million by Eurowings.

Lufthansa Technik's MRO division has more than doubled their EBIT profit from last year to EUR135 millions.

Lufthansa Group expects its preferred measure, adjusted EBIT to surpass its 2019 performance (which saw it achieve EUR754m profit) in the second quarter 2023.

The group is continuing to be cautious with capacity and will guide at 85-90% for 2019.

Source: flightglobal.com