Lufthansa reveals disruption costs ten times higher than BA’s

Flight disruption so far this summer has cost the Lufthansa Group almost 10 times the amount reported in disruption costs at British Airways.

Lufthansa reported what it called ‘irregularity costs’ totalling €158 million in the three months to June in results announced yesterday.

British Airways parent IAG reported last week that disruption cost BA £15 million in the same period – not much more than one tenth of Lufthansa’s costs – despite BA being forced to cancel 18% of its summer schedule.

However, BA managed to limit the costs by cancelling many flights well in advance, axing 10% of its summer schedule as far back as April.

More: Lufthansa pilots threaten industrial action over pay

Lufthansa chief executive Carsten Spohr admitted the causes of disruption had not been resolved, saying: “July was a very difficult month and probably August will be also.”

The group forecast ‘irregularity costs’ for the year would total “€450 million to €500 million”.

Spohr conceded: “When it comes to operations, I would definitely like to be in a better position than we are currently experiencing.”

He said the post-pandemic restart had been marked by “unforeseen high demand in all classes and by an aviation system all around the world that cannot yet adequately serve this demand.

“The last few weeks have been marked by painful operational irregularities in a way we’ve not experienced before, certainly not at Lufthansa.

“The ramp up from just 20% [capacity] to 80% in just a few weeks was just too steep.

“There are industry wide staff shortages on top of high sickness rates, air space closures due to Ukraine and air supply problems added to this.”

Spohr was speaking as Lufthansa reported a net profit of €259 million for the three months to June.

He said: “We are satisfied with the financial results. But the joy of good demand is clouded by operational difficulties.

“Our top priority remains the stability of flight operations. We implemented numerous measures to ease this tense situation. We took a large number of flights out of the schedule.

“We brought back and are bringing back employees who recently left, and in the second half of this year alone we are hiring about 5,000 new employees – the vast majority in operations.

“A similar number of new hires is planned for 2023.”

Spohr added: “We introduced additional shifts which we financially incentivised for staff, for example at check-in and at gates.”

Chief financial officer Remco Steenbergen said: “Unfortunately, we expect customer compensation payments and duty of care expenses to remain high in July and in the months thereafter.

“In the full year we expect irregularity expenses to amount to €450 million to €500 million.”

More: Lufthansa pilots threaten industrial action over pay

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