FRANKFURT- In the third quarter (Q3), all passenger airlines within the Lufthansa (LH) Group reported substantial year-on-year growth in their results.
Together, their Adjusted EBIT for the quarter totaled EUR 1.4 billion, marking an impressive 91 percent improvement compared to the same period in the previous year when it was EUR 709 million.
Lufthansa Reports Strong Q3 Results
This remarkable increase can be primarily attributed to a combination of robust demand, increased capacity offerings, and consistently high yields. Yields, surpassing the 2019 third-quarter levels by 25 percent, reached an all-time high.
Furthermore, there was sustained strong demand for leisure travel during the third quarter, particularly in the premium travel segment.
During the third quarter, the total capacity of the Lufthansa Group’s passenger airlines increased by 13 percent when compared to the same period in the previous year. This capacity equated to 88 percent of the pre-crisis 2019 level.
Impressively, more than 86 percent of the available seats were sold, resulting in a seat load factor that remained largely consistent with the previous year.
In the third quarter of 2023, the Lufthansa Group’s airlines saw a substantial increase in the number of customers choosing to travel with them compared to the previous year.
Collectively, these airlines warmly welcomed over 38 million travelers during the period from July to September, a notable rise from the 33 million passengers in the previous year.
Strong demand was observed across all traffic regions, and there was a noticeable trend of an increasingly international customer base for the Lufthansa Group. In this year, more than 70 percent of all passengers commenced their journeys from locations outside Germany.
Outlook for Q4-2023 and 2024
The Lufthansa Group foresees robust demand for air travel in the upcoming months. The strong demand experienced during the summer has carried over into October, and there is a notable appetite for air travel during the Christmas season.
Both short-haul and long-haul flight segments are witnessing high demand, particularly among leisure travelers. Within this context, the trend of increased bookings in premium classes, such as Business Class or First Class, persists.
The Lufthansa Group is preparing to raise its capacity in the fourth quarter to approximately 91 percent of the level seen in 2019.
Bookings for the fourth quarter currently show double-digit percentage growth compared to the previous year, despite the fact that private travel traditionally constitutes a smaller portion of air traffic during this time compared to the summer months.
Remarkably, more than 80 percent of the passengers the company anticipates carrying in the fourth quarter have already booked their flights or have already traveled with the Group’s airlines in October.
The Lufthansa Group anticipates achieving a positive operating result in the fourth quarter of 2023, with contributions expected from Lufthansa Cargo and Lufthansa Technik.
Despite the recent uptick in fuel costs, the Group maintains its prior projection of achieving an Adjusted EBIT exceeding EUR 2.6 billion for 2023.
Incoming: 30 New Aircraft
In 2024, the company foresees increasing its capacity to around 95 percent of pre-crisis levels. The target for the Adjusted EBIT margin is at least 8 percent. The Group’s fleet is set to expand by approximately 30 new aircraft based on current delivery schedules.
Favorable access to MRO (Maintenance, Repair, and Operations) capacities through Lufthansa Technik, as well as successful efforts in recruiting new flight operations personnel, positions the company well for growth that exceeds industry averages and is profitable.
Efficiency enhancements are expected to lead to reduced unit costs, contingent on the continuous improvement of system-wide operational stability, particularly in the Group’s domestic market of Germany.
Nevertheless, the company remains vigilant regarding geopolitical and macroeconomic risks and retains the flexibility to adapt its plans as needed.
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