The Lufthansa Group has recorded the highest second quarter result ever for SWISS, Austrian Airlines, Brussels Airlines, Eurowings and Lufthansa Technik.
The Group’s adjusted EBIT in quarter two 2023 came in at a record EUR 1.1 billion amid strong demand for air travel and high yields.
Strong performance across all passenger airlines
One of the key drivers behind the Lufthansa Group’s exceptional second-quarter results is the soaring global demand for air travel. This high demand translated into a significant surge in passenger numbers for the Group’s Passenger Airlines.
In the first half of the year, these airlines welcomed over 55 million travelers, marking a remarkable 30 percent increase compared to the same period in the previous year (2022).
Notably, the second quarter alone saw 33.3 million passengers flying with the Group’s airlines, constituting 84 percent of the passenger traffic level recorded in 2019.
Steady capacity expansion
To cater to the growing demand, the Lufthansa Group’s passenger airlines strategically increased their capacity throughout the first half of the year. This expansion amounted to 19 percent higher capacity compared to the same period in the prior year.
However, despite this significant increase, the capacity remained 21 percent lower than the pre-crisis levels. For the second quarter in isolation, the capacity offered reached an impressive 83 percent of the capacity recorded in the pre-crisis year of 2019.
This cautious approach to capacity planning was influenced by potential bottlenecks, particularly in handling service providers and air traffic control.
Stable operations and improved punctuality
During the second quarter, the Lufthansa Group prioritized maintaining stable flight operations, a strategy that yielded positive results.
The punctuality of flights notably improved to 70 percent during the first six months of the year. This commitment to punctuality further enhanced the travel experience for passengers.
Increased Yields
The persistent demand, particularly in premium classes, coupled with constrained capacity, resulted in a remarkable 13 percent increase in yields for the passenger airlines compared to the previous year.
With a seat load factor of 83 percent, the Lufthansa Group’s flights matched the busyness observed before the onset of the Corona pandemic in 2019.
However, it’s important to note that the impressive financial results were achieved amidst challenges. The Group faced cost inflation across the industry, especially in areas such as air traffic control, airport charges, and maintenance expenses.
Additionally, one-time costs associated with extensive measures to ensure operational stability and the expansion of flight operations had an adverse impact on passenger airline costs, contributing to a 7 percent increase in unit costs compared to the previous year.
Improved EBIT
Overall, the Adjusted EBIT of the Passenger Airlines skyrocketed by nearly 1 billion euros to 965 million euros in the second quarter of this year.
This remarkable improvement is in stark contrast to the previous year’s result of -86 million euros. Notably, every airline within this segment achieved a positive result.
Looking at the cumulative performance of the first six months, the Adjusted EBIT surged by almost 1.7 billion euros to 453 million euros compared to the previous year’s figure of -1.2 billion euros.
Lufthansa Cargo and Lufthansa Technik
The Lufthansa Group’s positive performance extended beyond its passenger airlines. In the second quarter of the year, the normalization of rates within the global airfreight market progressed as anticipated.
Despite reduced demand, Lufthansa Cargo managed to maintain average yields that were an impressive 40 percent higher than the pre-crisis levels of 2019. This accomplishment underscored Lufthansa Cargo’s ability to outperform the market during challenging times.
Furthermore, the freight capacity for the second quarter registered a six percent increase compared to the previous year. This uptick can be attributed to the recovery in passenger flight operations, leading to expanded belly capacities for cargo transportation.
Although Lufthansa Cargo’s Adjusted EBIT experienced a decline to 37 million euros in the second quarter, a comparison to the previous year’s figure of 482 million euros highlights the extraordinary nature of the pre-pandemic market conditions.
Despite the decline, the results remained considerably higher than those achieved in 2019. In the first half of the year, Lufthansa Cargo’s Adjusted EBIT amounted to 188 million euros, significantly surpassing the previous year’s performance of 977 million euros.
Lufthansa Technik also demonstrated exceptional business performance in the second quarter of 2023. The Maintenance, Repair, and Overhaul (MRO) segment benefited from sustained high demand for air travel and increased demand from airline customers for maintenance and repair services.
This translated into an impressive 39 percent year-on-year increase in Adjusted EBIT, reaching 156 million euros in the second quarter.
Moreover, the company’s first-half Adjusted EBIT amounted to 291 million euros, reflecting a substantial 21 percent increase compared to the previous year.
CEO Outlook
Carsten Spohr, the CEO of the Lufthansa Group, expressed his gratitude to the dedicated employees who contributed to the company’s success. He acknowledged that their efforts ensured reliable flight operations and contributed to the Group’s historically successful second quarter.
Spohr emphasized the Group’s focus on stability, a strategy that proved beneficial to customers, employees, and shareholders alike.
Spohr also highlighted strategic developments, including agreements related to the sale of LSG Group and AirPlus, as well as the acquisition of ITA.
These strategic moves, along with the positive financial outlook, reaffirm the Lufthansa Group’s trajectory towards achieving its capital market targets in the medium term. This positive momentum enables the Group to invest in premium quality for customers and create new opportunities for its employees.
Additionally, the expansion of the Lufthansa long-haul fleet, including the return of A380s and the introduction of Boeing 787s and Airbus A350s, is anticipated with great optimism.
