GERMANY- On August 3, 2023, German flag carrier Lufthansa (LH) Group posted a record Q2 result amid strong travel demands.
In the second quarter, Group revenues surged to 9.4 billion euros, a remarkable 17 percent increase compared to the previous year’s 8.0 billion euros. The operating result (Adjusted EBIT) experienced a substantial rise, reaching 1.1 billion euros and nearly tripling the previous year’s 392 million euros.
Lufthansa Q2 Result
This achievement equates to an operating margin of 11.6 percent, setting a new record for Lufthansa Group’s second-quarter performance. Additionally, net income reached an unprecedented peak of 881 million euros, surpassing the previous year’s 259 million euros.
During the initial half of 2023, the Group reported an Adjusted EBIT of 812 million euros, exhibiting a substantial improvement of nearly 1 billion euros compared to the previous year’s -185 million euros.
The Adjusted EBIT margin also exhibited notable growth, reaching 4.9 percent for the first half-year, a significant rise from the previous year’s -1.4 percent. Revenues for the first half of 2023 amounted to 16.4 billion euros, exceeding the previous year’s 13.0 billion euros.
CEO Insights
“Thanks to the dedicated efforts of our workforce, we have successfully averted a situation akin to last summer and have once again provided our customers with a more dependable operation.
Whether on the ground, in the cockpit, within the cabin, or in our maintenance facilities, our global employees’ collective effort has facilitated reliable flight operations and the most financially prosperous second quarter in our history.
Our unwavering focus on stability has proven to be the right strategic choice for the benefit of our customers, employees, and shareholders. Additionally, we have refined our strategic direction through agreements encompassing the sale of LSG Group and AirPlus and the acquisition deal for ITA.
Our forecast presents a promising trajectory for customers, employees, and shareholders alike. The projected profit forecast clearly demonstrates our alignment with the medium-term capital market objectives we have set.
This positions us to make targeted investments in enhancing premium quality services for our customers. Concurrently, our ongoing recruitment campaign, enlisting over 1,000 new hires each month, opens new avenues for our employees.
Furthermore, our Lufthansa long-haul fleet presents a distinct outlook. In the upcoming year, we anticipate the return of two more A380s to scheduled service, followed by additional Boeing 787s and Airbus A350s. This optimistic view propels us forward with excitement.”
Future Outlook
The Lufthansa Group foresees a sustained high demand for flight tickets throughout the remainder of the year, with people’s eagerness to travel showing no signs of abating.
Presently, bookings for the period spanning August to December 2023 are averaging over 90 percent of the pre-crisis booking volume.
As a result, the company is persisting with its expansion of capacity and intends to offer approximately 88 percent of pre-crisis capacity in the third quarter of the year.
Given the continued strong demand for air travel and industry-wide supply limitations, the company anticipates a slight increase in yields compared to the record levels achieved in the preceding year.
This leads to an expectation that Adjusted EBIT in the third quarter will surpass the pre-crisis figure of 1.3 billion euros recorded in 2019.
The Lufthansa Group foresees strong demand throughout the remainder of the year, particularly in the premium classes, driven primarily by private travelers.
The upward trend in demand for business travel is also gaining momentum, and the Lufthansa Group projects that it will rebound to approximately 70 percent of pre-crisis levels by year’s end.
Nevertheless, due to ongoing limitations in the European air traffic system, the capacity provided by Lufthansa Group airlines will be positioned towards the lower end of the prior expectation range, approximately 85 percent.
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