The Lufthansa Group has forecast a “travel boom” this summer and record traffic revenue this year despite reporting a €467 million loss for the first quarter.
Lufthansa hailed “continued high demand, especially in the private [leisure] travel segment” as it reported a 20% fall in first-quarter losses year on year, noting: “Pent-up demand following the pandemic remains high.”
The airline group, which includes Swiss, Austrian Airlines, Brussels Airlines and Eurowings as well as Lufthansa, reported average yields on fares up 19% on 2019 and yields on some long-haul routes up 25%.
Group chief executive Carsten Spohr said: “The Lufthansa Group is back on track.”
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He hailed “a good first quarter” despite the costs of expanding flight operations, “investments in operational stability” and strikes at German airports “weighing on earnings” and said: “We expect a travel boom in the summer as well as a new record in traffic revenue for the year.”
Spohr noted a “faster recovery in the private travel segment” than in business travel and said: “On short and medium-haul leisure routes, demand already exceeds 2019 levels.”
Capacity across the group’s airlines expanded to 75% of the 2019 level, 30% up on the first quarter of 2022, and is set to rise to 82% in the three months to June, with capacity over the full year reaching 85%-90% of 2019 capacity.
Spohr argued Lufthansa “is well positioned to strengthen its position among the top-five airline groups in global competition”.
Chief financial officer Remco Steenbergen said: “The continuously strong demand gives us confidence for the coming months.
“At the same time, we continue to invest in operational stability even if this means we are currently operating at a much lower efficiency and productivity level than originally planned.”
He reported productivity levels 10%-15% below the pre-pandemic level.
However, Steenbergen insisted: “We have great potential to increase our earnings once we leave the ramp-up phase behind and the overall system gains further stability.”
Lufthansa agreed the sale of its group catering division LSG Group to private equity company Aurelius in early April. The transaction is expected to close in the third quarter of 2023.