Profits down for Lufthansa Group, the German aviation giant which it also controls ITA Airways (formerly Alitalia) together with other companies such as Eurowings, Austrian Airlines and Brussels Airlines. The civil aviation giant, listed in Frankfurt, lost 2.85% today after the publication of the quarterly results in chiaroscuro.
Record revenues, but declining profits
Lufthansa delivered in the 3rd quarter record revenues, equal to 10.7 billion euros, up 5% compared to the 10.3 billion euros of the previous year, thanks to the good performance of almost all the group’s brands: from the services company Lufthansa Technik, which provides maintenance and repairs for aircraft, to smaller airlines such as Eurowings, Austrian Airlines and Brussels Airlines and Lufthansa Cargo.
However, the group reported a Adjusted EBIT decreased to 1.3 billion euros from the previous 1.5 billion euros, while the operating margin fell to 12.5% from the previous 14.3%, due to an increase in maintenance and repair cysts and personnel-related cysts. Net profit it has so fallen to 1.1 billion euros from the previous 1.2 billion.
A strong summer season
CEO Carsten Spohr he talked about another “strong” summer seasonrecalling that “global air traffic reached its capacity limits again this summer” and that the Group’s load factor hit a record 88% in August.
The number one of the group, commenting on the contraction in profit, explained that “late aircraft deliveries, punctuality problems of the hubs in Germany e regulatory disadvantages have influenced” Lufthansa Airlineswhich then launched the “Turnaround” program to “address these and internal structural challenges”.
The plan aims to increase efficiency, reduce complexity and improve quality of the service offered, as well as moving short-haul flights towards more convenient operations and expects, by 2026, to reach a gross EBIT of approximately 1.5 billion euros.
The outlook for 2024
The Lufthansa Group expects demand for air travel to remain strong in the remaining months of the year and expects to further increase its capacity in the fourth quarter compared to the previous year. For the full year 2024, capacity is expected to be approximately 91% of the pre-crisis level. The Group also expects a positive operating result for the fourth quarter and formulates an estimate of Adjusted EBIT between 1.4 and 1.8 billion euros for the entire year.
