Lufthansa Group’s adjusted EBIT surged above €1 billion ($1.1 billion) in the April-June period, buoyed by strong demand and high yields amid industry-wide supply constraints.
Reporting its second-quarter earnings on 3 August, the group said it expects no let-up in recent high demand for air travel in the second half of 2023, and a “further slight increase” in passenger yields.
Demand was particularly high in premium classes during the second quarter, the group says, while “restricted capacity” led to a 13% increase in yields at passenger airlines compared with the previous year, on a load factor of 83%.
That helped the group to an adjusted EBIT of €1.1 billion in the three months, equating to an operating margin of 11.6% – a record for the business. In the same period of last year its adjusted EBIT came in at €392 million.
Total revenue of €9.4 billion was up 17% year on year, but still lagged its 2019 result of €10.2 billion.
Unit costs were up 7% amid price inflation, “particularly for air traffic control and airport charges”, and costs associated with aircraft maintenance and spares.
Net income of €881 million marks a “new high”, the group adds.
The group saw the “highest second-quarter results” ever at Swiss, Austrian Airlines, Brussels Airlines, Eurowings and Lufthansa Technik, with all passenger airlines achieving a positive result. That meant the Passenger Airlines unit swung from a loss of €86 million in the second quarter of last year to an adjusted EBIT of €965 million this year.
Lufthansa Cargo is seeing rates decline as the freight market ‘normalises’ but still remained profitable, contributing an adjusted EBIT of €37 million, albeit way down on the €482 million reported last year.
The group offered 83% of its pre-Covid passenger capacity in the second quarter, on passenger numbers at 84% of 2019 levels. It expects capacity to rise to 88% in the current quarter.
It notes that its net debt is now below pre-Covid levels.
The group expects to achieve a full-year adjusted EBIT of at least €2.6 billion.
