Immediately before the US airports open to EU citizens, Lufthansa reports a first small profit after the corona shock. In the coming year, the crane airline wants to really take off.
On its flight through the Corona crisis, Lufthansa is gradually seeing light on the horizon. After the MDax group reported an initial mini-profit for the summer quarter of 2021 on Wednesday, the strong freight and the resuming US business should soon ensure that the numbers are in the black again.
In the current year, the management around boss Carsten Spohr trusts itself to at least halve the operating loss of almost 5.5 billion euros last year. “The crisis is not over, but we are making tremendous progress to emerge stronger from the crisis,” he said.
The Lufthansa boss was convinced that he had largely left the crisis behind. At least 70 percent of the corporate restructuring implemented, annual costs of 2.5 billion euros cut. With further increases in vaccination rates and increasing booster vaccinations, an operating profit will be achieved again in the coming year.
The flight offer is to increase from now 60 percent to up to 80 percent of the pre-crisis level in 2022, said CFO Remco Steenbergen. The annual average will then be around 70 percent after around 40 percent in the current year.
Hope for freight and US business
The sustained strong freight business, which has been expanded with two more machines, and the US market, which will also be accessible again to vaccinated EU citizens from Monday (November 8th), should help. “The USA is finally opening up,” said Spohr happily. For the coming week, demand is already 81 percent of the pre-crisis level and for summer 2022 even above.
The US business has been going well for months, because Lufthansa flies a lot of cargo across the Atlantic as well as US citizens, Arabs and other nations that are not subject to the entry ban imposed by the US in March 2020.
In addition to the high pent-up demand of private travelers, experience with US companies shows that business trips are also coming back much more strongly than expected, explained Spohr. In the long term, he expects the losses in this sector due to increasing online conferences and increasing concerns about environmental pollution to be less than 10 percent.
With the purchase of sustainably produced, synthetic fuel (SAF) amounting to 250 million US dollars by 2024, Lufthansa also wants to meet the demand for climate-neutral flights. Spohr reported that the first contract had just been signed with a corporate customer whose managers will only be traveling on SAF flights in the future.
Lufthansa flies in a small profit in the summer
For the summer quarter (July to September), the Lufthansa Group posted its first operating profit (adjusted EBIT) since the beginning of the Corona crisis, at 17 million euros. In addition to the freight, holiday flights within Europe in particular brought money into the coffers.
The bottom line, however, was still a loss of 72 million euros in this quarter – but a significant improvement after a loss of 2.0 billion euros in the summer quarter of 2020. Quarterly sales almost doubled to 5.2 billion euros over the course of the year. Despite the summer high and continued high profits in freight until the end of the year, Lufthansa remains far from black for the year as a whole.
On Monday, Europe’s largest low-cost airline Ryanair reported a net profit of 225 million euros for the summer months from July to September. Operationally, the Irish with their low restructuring costs were even 254 million euros. Group leader Michael O’Leary announced more competitive prices to lure more passengers into his planes.
The freight subsidiary Lufthansa Cargo continued to benefit from the high demand and scarce capacities in the global logistics market. With an operating profit of 301 million euros, it earned more than ever in a third quarter and, with its traditionally strong year-end business, is aiming for well over a billion euros in annual profit.
In addition, the direct flight subsidiary Eurowings, the maintenance division Lufthansa Technik and the catering subsidiary LSG Sky Chefs achieved operating profits again in the summer. However, the group’s network airlines – Lufthansa, Austrian, Swiss and Brussels – were again in the red.
Spohr warned of rising fees and costs at the various system partners such as airports and air traffic control. The disadvantages from the lower number of flights should not simply be passed on to the remaining flights. The Lufthansa boss attested that the Frankfurt hub had problems coping with the growth that is now starting again. Therefore, more and more aircraft are being relocated to Munich. On Tuesday, Fraport boss Stefan Schulte described personnel bottlenecks during ramp-up and prepared the customers for longer waiting times for service.
The downsizing continues
The job cuts in the Lufthansa Group meanwhile continued. According to the information, Lufthansa was still employing around 107,000 people at the end of September. In Germany alone, 4,000 employees have left the company so far this year, with another 3,000 being agreed to leave the company. According to management estimates, Lufthansa still has up to 3,000 too many employees in Germany, including many pilots. Spohr stated again that he would like to keep them on board with part-time models.
By the end of the year Lufthansa wants to have repaid the last billion from the silent participation of the German state. In addition, the company had collected 2.16 billion euros in a capital increase completed in October. The remaining shares in the state economic stabilization fund amounted to 14.09 percent of the total capital after the capital increase.
Source From: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
