The Lufthansa Group has posted its Q3 2023 results, showing its airlines achieved a record summer. Passenger airlines carried 38 million travelers between July and September, and all reported double-digit third-quarter Adjusted EBIT margins.
The fourth quarter is strong, with booking volumes showing double-digit percentage growth.
A Strong Summer Season
The Lufthansa Group’s airlines turned in a strong Q3 2023 result, with an impressive 38 million passengers traveling between July and September.
What’s even more significant is that all airlines under the Group reported double-digit third-quarter Adjusted EBIT margins, underlining their financial stability and performance.
The momentum from the summer season is set to continue into the fourth quarter. Booking volumes are already showing double-digit percentage growth, indicating a robust end-of-year performance for the Group.
Record-Breaking Revenues
One of the most notable aspects of the Q3 results is the Group’s impressive financial performance. Total Group revenues increased by 8 percent compared to the previous year, reaching EUR 10.3 billion.
This historic high in revenue demonstrates the Group’s strength and resilience in a challenging aviation market.
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Operating Results
The Lufthansa Group posted an operating result (Adjusted EBIT) of EUR 1.5 billion in the third quarter, marking a 31 percent improvement compared to the prior-year period.
This result is the second-best quarterly performance in the Group’s history, highlighting its consistent growth and financial stability.
Passenger Operations
All passenger airlines under the Lufthansa Group witnessed a substantial increase in their third-quarter results.
Their combined Adjusted EBIT reached EUR 1.4 billion, representing a remarkable 91 percent improvement compared to the previous year.
This impressive growth can be attributed to strong demand, increased capacity, and high yields.
Yield Levels
Yields reached a new record high in Q3, standing at 25 percent above the 2019 third-quarter levels. The Group’s dedication to providing top-quality services and its commitment to customer satisfaction have paid off, with demand for leisure travel remaining strong, especially in the premium segment.
Despite facing rising costs, the Lufthansa Group managed to keep unit costs in the third quarter 0.9 percent below the previous year’s levels.
Capacity Expansion
The Group’s passenger airlines increased their capacity by 13 percent in the third quarter compared to the prior year, reaching 88 percent of the 2019 pre-crisis level. This expansion, along with a strong demand for air travel, led to over 86 percent of all seats offered being sold, maintaining a consistent seat load factor compared to the previous year.
The Lufthansa Group experienced a significant internationalization of its customer base in 2023, with more than 70 percent of all guests starting their journey outside Germany.
This shift highlights the Group’s global appeal and its ability to attract travelers from various regions.
Success for Lufthansa Technik
Lufthansa Technik, the Group’s engineering arm, achieved record earnings in Q3. The high demand for air travel and increased demand for maintenance, repair, and overhaul (MRO) services contributed to its success.
Although the Adjusted EBIT for the third quarter was EUR 168 million (compared to EUR 188 million the previous year), it’s essential to note that the previous year’s result benefited from a more favorable US dollar exchange rate.
Lufthansa Group Q4 Outlook
The Lufthansa Group’s outlook for the coming months is exceptionally positive. Strong demand for air travel, extending from summer into October and the Christmas season, is a clear indicator of the industry’s resilience. Both short-haul and long-haul flights remain popular, especially among leisure travelers.
In the fourth quarter, the Group plans to increase its capacity to around 91 percent of its 2019 levels. Bookings for this period have already shown double-digit growth, even though private travel traditionally accounts for a lower share of traffic in the winter months.
Despite recent increases in fuel costs, the Group expects to achieve a positive operating result in the fourth quarter of 2023, with contributions from Lufthansa Cargo and Lufthansa Technik.
The Group remains committed to generating an Adjusted EBIT for 2023 of more than EUR 2.6 billion.
A Glimpse into 2024
Looking ahead to 2024, the Lufthansa Group is poised for further expansion, with a target capacity of around 95 percent of pre-crisis levels.
The Group also aims for an Adjusted EBIT margin of at least 8 percent. The addition of new aircraft to the fleet, access to MRO capacities through Lufthansa Technik, and efficient workforce recruitment position the company for above-industry-average growth.
While the outlook is promising, the Lufthansa Group remains cautious, acknowledging geopolitical and macroeconomic risks and emphasizing the need for flexibility to adapt to changing circumstances.
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