Lufthansa Group reported strong bookings in the first quarter of 2023 and announced that it expects another travel boom in the summer.
Carsten Spohr, Chief Executive Officer of Deutsche Lufthansa AG, said:
“The Lufthansa Group is back on track. After a good first quarter in which we were able to significantly improve our result, we now expect a travel boom in the summer as well as a new record in our traffic revenue for the year as a whole. On short- and medium-haul leisure-oriented routes, demand is already exceeding 2019 levels. The focus now is on once again offering our guests a consistent premium product experience on all group airlines. Our guests are already benefiting from numerous product improvements, both on the ground and on board. The Lufthansa Group is well positioned to further strengthen its position among the top five airline groups in global competition.”
Result First Quarter 2023
The Lufthansa Group significantly improved its result in the first quarter of 2023 compared with the previous year. This was due to the continued high demand for flight tickets – especially in the private travel segment. Pent-up demand following the Corona pandemic remains high as the high booking inflow for the summer months in the first quarter of the year clearly demonstrates.
The Group result for the first three months is still negative. This is mainly due to normal seasonality. This year, seasonality is even exacerbated by the faster recovery in the private travel segment compared to the business travel segment. Costs for the planned expansion of flight operations in the summer, investments in operational stability, and the effects of various strikes at German airports (in which the Lufthansa Group was not a negotiating partner) also weighed on earnings. However, the operating loss was halved compared to the previous year.
The Group increased its revenues by 40 percent to 7.0 billion euros
(previous year: 5.0 billion euros).
The Adjusted EBIT was -273 million euros (prior year: -577 million euros).
The company thus achieved a significantly better result in the first quarter than in the first quarter of 2019 (Adjusted EBIT first quarter 2019: -336 million euros).
Adjusted EBIT margin improved accordingly to -3.9 percent (prior year: -11.5 percent).
The net loss decreased by 20 percent to -467 million euros (previous year: -584 million euros).
Group airlines improve result significantly
During the first quarter, significantly more people flew with the airlines of the Lufthansa Group than in the previous year. In total, the airlines of the Lufthansa Group welcomed 22 million passengers on board between January and March (previous year: 13 million). Capacity was significantly expanded to 75 percent of the pre-crisis level in 2019 due to sustained high demand and was thereby 30 percent above the previous year’s level in the first quarter.
Passenger airline revenue rose by 73 percent in the first quarter to 5.2 billion euros (previous year: 3.0 billion euros). In particular, the development of yields, which were 19 percent higher in the first quarter than in 2019, demonstrate the strength of demand. On long-haul routes, yields increased by as much as 25 percent. However, due to seasonality and the preparations for the expansion of flight operations in the summer months, the result was negative. The Group passenger airlines generated an Adjusted EBIT of -512 million euros in the first quarter of 2023 (previous year: -1.1 billion euros).
Lufthansa Cargo earnings normalize, Lufthansa Technik improves prior-year result
The logistics segment again generated an operating profit in the first quarter of 2023. However, this was below the record result of the first quarter of the previous year due to the market-wide normalization of air freight rates. Last year, the crisis-related reduction in air freight capacity combined with a sharp rise in demand due to disrupted supply chains had led to record revenue. Lufthansa Cargo generated an Adjusted EBIT of 151 million euros in the first quarter (previous year: 495 million euros)
Lufthansa Technik improved its results in the first quarter of 2023 compared to the same period of the previous year. High demand for air travel led to further demand for maintenance and repair services, with revenue rising accordingly. Lufthansa Technik generated an Adjusted EBIT of 135 million euros in the first quarter (previous year: 129 million euros).
The LSG Group’s result for the first quarter was -6 million euros (previous year -14 million euros), while revenue increased by 40 percent to 523 million euros, supported by a noticeable recovery in Asian business.
On April 5, Deutsche Lufthansa AG signed an agreement with the private equity company AURELIUS on the sale of the LSG Group. The transaction is expected to close in the third quarter of 2023. The earnings contributions of the catering segment will be reported as “Result from discontinued operations” until then. They will thus be included in the net result, but no longer in the Group’s Adjusted EBIT.
Adjusted free cash flow positive, liquidity remains above target level
