European airline giant Lufthansa Group expects demand for flights to “remain strong” for the rest of 2024, with “particularly high” bookings of business class seats.
The group, which also owns Austrian Airlines, Brussels Airlines, Swiss and Eurowings, achieved the “strongest revenue quarter in the company's history” in the third quarter, with total sales reaching €10.7 billion and the company making an operating profit of €1.3 billion.
Group CEO Carsten Spohr said the company had also achieved a record seat load factor of 88 per cent in the peak summer travel month of August.
“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,” added Spohr.
“With all passenger airlines operating at a profit, Eurowings, Austrian Airlines and Brussels Airlines even generated record results in the third quarter.”
But Spohr also highlighted the problems faced by its “core” Lufthansa brand, which is currently going through a “turnaround” restructuring process.
“Delayed aircraft deliveries, punctuality issues at our hubs in Germany and regulatory disadvantages are impacting our core brand,” he added. “Lufthansa Airlines has therefore launched the turnaround programme to address these and structural internal challenges.”
The company said that Lufthansa Airlines’ ongoing restructuring process was “making progress” and aims to improve the carrier’s financial position by €1.5 billion by 2026.
“Among other things, the turnaround plan envisages shifting more short-haul traffic to more cost-efficient flight operations,” said the group in a statement. “Further efficiency gains are to be achieved by optimising the network and increasing flexibility and automation.”
Although the group’s Q3 revenue was up 5 per cent compared with the previous year, the operating profit of €1.3 billion was down from a profit of €1.5 billion in the third quarter of 2023. This drop was attributed to “significant cost increases, particularly in fees, MRO (maintenance, repair and operations) expenses and personnel”.
The group’s airlines carried traffic of 40 million passengers in the third quarter, which was up by 6 per cent compared with Q3 of 2023, although average yields fell by 3.5 per cent year-on-year.
Lufthansa added that there was a “mixed” performance for different global regions, with short-haul continental routes seeing only a small fall in yields of 0.4 per cent, while yields on flights to the Asia Pacific region plunged by 14 per cent year-on-year.
The company said that load factors for November and December were “well above” levels seen at this time last year, and that overall capacity would increase compared with Q4 of 2023. Lufthansa expects total capacity in 2024 to reach 91 per cent of pre-Covid levels.