Lufthansa Group has released preliminary results for the first quarter of 2024. The figures reveal a wider Adjusted EBIT loss compared to last year.
The Group reported a loss of EUR 849 million, significantly higher than the EUR 273 million loss in Q1 2023.
This increase is attributed primarily to a series of strikes by various employee groups within Lufthansa and its partners. The fallout for these actions has resulted in an estimated EUR 350 million earnings hit.
Despite the losses, the Group maintained positive Adjusted free cash flow of EUR 305 million, driven by continued strong inflows from advance ticket sales.
Weaker Q2 Operating Result Expected
Strike action by unions over pay and conditions disputes saw the airline Group cancel or delay thousands of services. Up to one thousand flights per day were being cancelled across the Group’s stable of airlines.
Looking further ahead, the Group anticipates a weaker operating result in Q2 2024 compared to the previous year.
This is due to a projected EUR 100 million negative impact stemming from recently settled wage disputes, particularly at Lufthansa Airlines, that temporarily dampened travel bookings.
Additionally, ongoing labor conflicts at Austrian Airlines and a slightly slower than planned capacity ramp-up are expected.
This is largely due to both punctuality improvements and aircraft delivery delays, which are expected to contribute to the lower Q2 performance.
The supply chain issues and subsequent delivery problems from both Airbus and Boeing remain. This have remained key issues throughout the sector, and will continue to take their toll on the Group.
Positive Signs Remain for H2 2024
However, positive signs still remain. Overall booking trends, particularly for the summer season, are on track with original expectations, supporting the Group’s full-year forecast of a stronger second half.
This revised outlook translates into an expected Adjusted EBIT of around EUR 2.2 billion for the entire year. Previously: stable earnings compared to EUR 2,682 million in 2023.
Adjusted free cash flow is also projected to be at least EUR 1 billion. This compares with a previous figure of at least EUR 1.5 billion.
It’s important to note that this full-year outlook faces potential risks arising from the recent escalation of conflict in the Middle East and broader geopolitical uncertainties.
The Group will provide a more detailed financial update with the release of its final Q1 results on April 30th.
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