“Uncompromising” industrial action at Lufthansa will deepen losses in the current winter quarter.
Parent company Lufthansa Group urged the trade union Verdi to suspend strikes which have affected hundreds of thousands of passengers so far this year.
Ground staff are currently involved in a 60-hour strike until Saturday morning, with the German airline admitting that only 10%-20% of flights will operate over the period, hitting delegates leaving trade show ITB in Berlin.
The German airline’s chief human resources and labour director Micheal Niggemann warned: “The uncompromising strikes by the trade union Verdi are damaging our guests, the company and ultimately our employees.
“We are always open to short-term negotiations with Verdi – however, we bear joint responsibility for finding good solutions. Verdi must suspend strike action and be prepared to enter into constructive negotiations without preconditions.”
His comments came as the group warned that its first quarter loss is expected to be higher than in the previous year, due to the impact of the strikes on earnings and a decline in profits in its logistics division.
Lufthansa insisted that its performance since mid-2022 had led to pay increases of more than 10% in addition to above average wage agreements and “variable renumeration”. More than half a billion euros has also been paid to employees in profits sharing.
The figures emerged as the group reported the third best financial result in its history in 2023 and forecast a continued rise in travel demand, particularly over Easter and the peak summer period.
All airlines in the group reported an operating profit for the first time with Swiss, Austrian Airlines, Brussels Airlines and Eurowings all achieving record results.
Annual revenue rose by 15% year-on year to €35.4 billion, resulting in the net profit more than doubling to €1.7 billion as passenger carryings grew by 20% to 123 million.
Lufthansa Group airlines increased the number of flights offered by 14% to 946,000 with the number of seats on offer gradually expanded over the course of the year.
The load factor improved by 3.1 percentage points to around 83%, returning to pre-Covid levels.
Load factors booked for the next three months are above last year’s level despite an increase in capacity.
The most popular destinations are Spain, Italy, Greece and other Mediterranean countries together with continued high demand for services to and from North America.
“Due to the strong demand, the group is further expanding the capacity offer of its passenger airlines. However, also in 2024, the focus will remain on ensuring stable flight operations in order to further improve regularity and punctuality,” the company said.
The average capacity on offer this year is projected to be at around 94% of 2019 levels, representing year-on-year growth of around 12%.
The group is expecting European Commission approval for an investment in the Italian airline ITA Airways “over the course of this year” and is working “closely and constructively” with Brussels “to achieve a swift conclusion”.
“With the planned investment in ITA Airways, the Lufthansa Group is driving forward the internationalisation of the company in order to make better use of attractive growth opportunities abroad,” the company said.
Chief executive Carsten Spohr hailed the group for regaining its financial strength.
“I would like to thank our customers for their continued loyalty and each and every one of our approximately 100,000 employees. With their above-average commitment, they made 2023 one of the three best years in Lufthansa Group’s history,” he said.
“This success benefits everyone. We want to pay our shareholders a dividend for the first time since 2019. We are also giving our employees a share in our good results development through significantly above-average collective wage agreements and profit-sharings.
“And this year, we also aim to finally return our customers’ satisfaction to premium levels. That is why we are investing the record amount of € 4.5 billion in new aircraft, in our cabin interiors, lounges, ground processes and in personal and digital services.
“As part of the largest fleet modernisation in our history, we expect to take delivery of at least 30 new aircraft this year, including around 20 long-haul jets for Lufthansa – another record.”