After two deep red “Corona years”, Lufthansa was able to announce high black figures again for the 3 financial year on Friday, March 2023, 2022. The operating profit adjusted for special items was communicated at around 1,5 billion euros.
The Kranich Group attributes this to various factors. They primarily benefited from the sharp rise in demand and higher ticket prices. The Freight and Maintenance divisions also made a positive contribution to the result.
CEO Carsten Spohr is not satisfied with the recent billion euro profit and wants to increase it further in 2023. Analysts forecast around 1,65 billion euros. In the previous year, the airlines in the Lufthansa Group had around 102 million passengers on board. In direct comparison with the value that was achieved in 2021, it has more than doubled.
Airlines were in the red in the first half of 2022
Although the group of companies was able to announce a high profit, a closer look at the figures shows that the passenger airlines were in the red at around 300 million euros. This also has to do with the fact that demand only skyrocketed in the second half of 2022. In the first half, you were in the red, which you couldn't fully compensate for. Compared to 2021, sales increased by 95 percent to around 32,8 billion euros. The bottom line is a surplus of 791 million euros, which is offset by a deficit of 2,2 billion euros from 2021.
Lufthansa intends to focus more on its core business in the future and to sell additional ancillary operations. This also includes the fact that the company wants to finally withdraw from the catering sector and either sell or list a minority share in Lufthansa Technik. In the long term, the company is investing in the long-haul fleet in particular, because on Thursday, March 2, 2022, it was announced that 22 additional machines had been ordered. The company is also striving to grow through acquisitions, because intensive negotiations are currently taking place about the gradual takeover of Ita Airways. You should also be interested in Tap Air Portugal.
Strong demand is expected
The Lufthansa Group expects continued strong demand for flight tickets for the current year. Demand for air travel during the Easter and summer holiday periods is particularly strong. The most popular destinations are again Spain, Italy, Greece and other Mediterranean countries. The Group's passenger airlines are also seeing continued high demand for connections to and from North America. Based on the current booking situation, the company assumes that average yields will remain high.
Due to the continued robust demand, capacities for passenger flights will be expanded. For the year as a whole, the Lufthansa Group expects available capacity to average 85 to 90 percent compared to 2019. Capacity development will be limited by the expected bottlenecks in the European aviation system. In the first quarter, supply will be around 75% of pre-crisis levels. For the 2023 financial year, the Lufthansa Group expects further progress towards achieving the targets set for 2024: an adjusted EBIT margin of at least 8 per cent and an adjusted ROCE of at least 10 per cent. Accordingly, the company expects a further significant improvement in adjusted EBIT for the 2023 financial year. Consistent with usual seasonality, results are expected to be particularly strong in the second and third quarters. Adjusted EBIT is expected to be negative in the first quarter.