Lufthansa Group expects demand for air travel to remain strong in the final months of the year after reporting record summer revenues despite aircraft delivery delays.
A strong peak travel season saw the German airline combine achieve the strongest revenue quarter it its history at €10.7 billion.
This generated an operating profit of €1.3 billion, down from €1.5 billion in the same three months in 2023.
The year-on-year decline was due to “significant cost increases”, particularly in fees, maintenance, repair and operations (MRO) expenses and personnel.
The drop in operating profit was mainly due to a €234 million decline in the result of Lufthansa Airlines.
“Delays in the delivery of new aircraft and the associated need to continue operating older aircraft, increased location costs, higher staff costs and expenses for compensation payments following flight irregularities had an above-average impact on the result,” the group disclosed.
“Lufthansa Airlines is consistently implementing its turnaround programme.
“The aim is to increase efficiency, reduce complexity and improve product quality, thereby making the airline fit for the future.
“Among other things, the turnaround plan envisages shifting more short-haul traffic to more cost-efficient flight operations. Further efficiency gains are to be achieved by optimising the network and increasing flexibility and automation.
“By 2026, the measures will have a gross EBIT effect of around €1.5 billion.”
The group’s net profit fell to €1.1 billion compared to €1.2 billion in the third quarter of last year.
However, it expects to report a positive operating result in the fourth quarter and is projecting an annual profit of €1.4-€1.8 billion.
“Load factors booked for November and December are well above the levels observed at the same time last year,” the company said.
“Demand remains particularly high in the premium classes, i.e. business class and first class.”
Capacity is to be raised further than last year in the current three months.
Overall capacity for the full year is expected to be around 91% of pre-pandemic levels.
Group chief executive Carsten Spohr said: “Today, we are reporting on another strong summer travel season, with a record seat load factor of 88% in August.
“Particularly in view of the fact that global air traffic again reached its capacity limits this summer, I would like to thank our employees for their efforts and our customers for the patience we sometimes had to ask for.
“Global demand remains intact and bookings for the fourth quarter are also at a high level compared to the previous year, particularly in the premium classes.
“With all passenger airlines operating at a profit, Eurowings, Austrian Airlines and Brussels Airlines even generated record results in the third quarter. Lufthansa Technik and Lufthansa Cargo also remain on track.
“At the same time, delayed aircraft deliveries, punctuality issues at our hubs in Germany and regulatory disadvantages are impacting our core brand.
“Lufthansa Airlines has therefore launched the turnaround programme to address these and structural internal challenges.
“Across the group, we are continuing to invest in the largest fleet modernisation in our history, in premium offers for our guests and in an even more international positioning.
“These three central pillars of our strategy will enable us to further expand our role as the leading airline group in Europe.”