Lufthansa Group reported a “significant” improvement in first quarter operating results and maintained a positive full-year outlook in a statement. The group includes Lufthansa, Swiss, Austrian Airlines, Brussels Airlines, ITA Airways and Eurowings — as well as smaller carriers.
Carsten Spohr, CEO, said the ongoing crisis in the Middle East, combined with rising fuel costs and operational constraints, “poses enormous challenges for the world as a whole, for global air travel, and for our company as well.” However, he said, “we are resilient in our ability to absorb these impacts.” This applies, said Spohr, “both to our above-average hedging against fuel price fluctuations and to our multi-hub, multi-airline strategy, which provides us with greater flexibility in our route network and fleet development.”
Spohr said that in the first quarter, the group had adjusted EBIT (earnings before interest and taxes) up over the previous year by 10 million euros (about $11.8 million) and net income up by 220 million euros (about $260 million). Group revenue rose by 8% to 8.7 billion euros (about $10.3 billion), a new record for a first quarter. The company posted an operating loss of 612 million euros (about $722 million), compared with the previous year’s loss of 722 million euros (about $852 million).
“We are achieving what we set out to do and delivering on what we promised,” said Spohr. From the perspective of customers, he said, “this applies in particular to our product and fleet renewal.” With seven new aircraft deliveries, including five long-haul aircraft, said Spohr, “we are fully on track in the first quarter of the year.”
Seat load factor increased to 81.9% in the first quarter, and unit revenues rose by 3.3% compared with the prior year. Both metrics were primarily driven by a strong surge in demand in March following capacity reductions via Middle Eastern hubs. This also significantly overcompensated for the fact that some connections to destinations in the Middle East could no longer be served.
Till Streichert, CFO of the group, said the current situation “compels us to rigorously examine every lever available to reduce costs, improve efficiency and mitigate risks in order to maintain our ability to act decisively.” The company’s annual profit, he said, will likely be lower than originally anticipated. Nevertheless, based on current booking trends, said Streichert, “we expect to be able to largely offset the high fuel costs successively —especially in the second half of the year.”
