Lufthansa has shared its second-quarter results and has become the latest airline to share its positive progress with a return to profit. The carrier has enjoyed a financially strong past couple of months, regardless of speedbumps in the form of schedule cuts and cancellations due to strike action – to name a few.
This comes as UK flag carrier British Airways achieved a profit over its second-quarter results for the first time since 2019.
Back in the black
Today, Lufthansa Group published its second-quarter results with a smile. The key takeaway is that the airline group has returned to profitability with a net profit of €259 million for Q2. Compared to the €756 million loss it suffered in the same period in 2021, the carrier is making immense progress in the right direction.
Lufthansa puts this down to a strong increase in average yields, a successful cargo segment and a heavy increase in passenger demand.
Those crucial factors helped the carrier achieve revenue for the quarter that was up by 164% compared to last year, rising from €3.211 billion to €8.462 billion. And while operational costs have risen to account for the increase in demand, the German flag carrier managed to balance the figures and achieve a net profit.
Lufthansa Group back to black with operating profit of 393 million euros and Adjusted free cash flow of 2.1 billion euros in the second quarter: https://t.co/UKLljG4fvk #Q2 pic.twitter.com/S5DWSAxTOL
— Lufthansa News (@lufthansaNews) August 4, 2022
In a statement released by the airline group, CEO of Deutsche Lufthansa AG Carsten Spohr was triumphant:
“This is a strong result after a half-year that was challenging for our guests but also for our employees. Worldwide, the airline industry reached its operational limits. Nevertheless, we are optimistic about the future. Together, we have steered our company through the pandemic and thus through the most severe financial crisis in our history. Now we must continue to stabilize our flight operations.”
Attitudes dictate profits
2022 marked the first year the majority of the globe was able to travel as normal – it was as close to 2019 as we were going to get! As a result, the aviation industry was hit with an unprecedented amount of enthusiastic travellers. Regardless of staffing issues across the industry making the demand rather difficult to manage, many carriers can thank the intense traffic for their post-COVID recovery and positive Q2 results.
This is also the case with Lufthansa.
The carrier had an average load factor of 80% in the second quarter which is close to 2019’s average load factor of 83%. This year’s Q2 load factor is also an impressive increase compared to last year – a 28.8% increase, to be exact.
In terms of the number of passengers carried, Lufthansa picked up 29.209 million people over Q2 this year. This figure represents 74% of 2019’s Q2 total, but it was also a 318% increase compared to the number of passengers carried in the second quarter last year.
Lufthansa explained:
“Demand for flights picked up significantly in the second quarter, despite the war in Ukraine and ongoing travel restrictions in Asia.”
The Star Alliance carrier also attributed “ongoing and consistent cost management and the expansion of flight capacity” to unit costs for their passenger airlines falling by 33% over this year’s second quarter compared to the same period last year.
The second quarter report also allowed us to examine the way in which trends played out. Despite the airline group operating a total of 370,430 flights in the first six months of 2022, over 63% of that figure came between April and June – the period in which air travel was at its busiest.
Remco Steenbergen, Chief Financial Officer of Deutsche Lufthansa AG, commented on how a return to profit was no easy feat:
“Returning to profitability in a quarter that was marked also by high geopolitical uncertainty and rising oil prices is a major achievement. This demonstrates that we are making good progress in recovering from the financial consequences of the Corona crisis. Even after the repayment of state aid last year, our goal remains to further strengthen the balance sheet on a sustainable basis.”
Staff and sustainability
In light of the heavy increase in demand (which possibly caught airlines and airports napping), Lufthansa is gearing up its recruitment drive. The company stated that it will be hiring “around 5,000 new employees” in the second half of 2022. Recruitment will be focused on the cockpit and cabin of subsidiaries Eurowings and Eurowings Discover, ground personnel at airports, catering staff at LSG and workers at Lufthansa Technik.
Elsewhere, Lufthansa’s climate protection and sustainability goals have been successfully validated by the “Science Based Target Initiative” (SBTi). According to the company, this achievement makes the Lufthansa Group the first aviation group in Europe with a CO2 reduction target in line with goals set by the Paris Climate Agreement of 2015.
What do you make of Lufthansa’s latest results? Are you a fan of the carrier, or has the chaos of the past couple of months put you off? Comment below to share your thoughts with us.
