Strong demand for tickets gives Lufthansa one of its best years
Published: Thursday, Mar 7th 2024, 10:50
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The return of the desire to travel and higher ticket prices have given Lufthansa the third-highest profit in its history in day-to-day business in 2023. However, further big leaps are not in sight.
In the midst of the ground staff strike, CEO Carsten Spohr announced on Thursday in Frankfurt that the operating result for the current year would only be at the previous year's level. The rise in ticket prices should be over for now. And Lufthansa will not be offering as many tickets as before the pandemic again in 2024. However, shareholders can look forward to a dividend again.
Lufthansa CEO Spohr sees the Group back to its former financial strength after the struggle for survival during the coronavirus pandemic. Last year, Lufthansa achieved an operating profit (adjusted EBIT) of just under EUR 2.7 billion before special items - around 76 percent more than in the previous year, which was still dominated by the pandemic. Only in 2017 and 2018, around the bankruptcy of its former rival Air Berlin, did the Group earn more in its day-to-day business.
Unlike in 2022, the passenger business again contributed the lion's share of the profit this time. The Group's own passenger airlines returned to the black with an adjusted operating result of 2 billion euros, after posting a loss of 300 million euros in the previous year.
Group subsidiaries with record results
The subsidiaries Swiss, Austrian, Brussels and Eurowings achieved record results - as did the maintenance division Lufthansa Technik. In the fall, the Executive Board called off the partial sale of the maintenance subsidiary, which had been planned in the meantime.
Meanwhile, Lufthansa Cargo was unable to repeat its record results from the pandemic years. While it had earned 1.6 billion euros in day-to-day business in 2022, this time it only contributed 219 million euros. The recovery in passenger traffic around the world meant that there was once again much more space available in the cargo holds of passenger jets. Prices for air freight transportation therefore fell significantly.
Tickets teurer
Airline tickets, on the other hand, became more expensive again, partly because the airlines' seat capacity was barely able to keep pace with the increased demand. Last year, the airlines in the Lufthansa Group carried around 123 million passengers, around a fifth more than in 2022. According to the figures, the average revenue per ticket grew by around six percent.
However, the Executive Board does not expect this trend to continue in the current year. Lufthansa CEO Spohr expects unit revenues in the passenger business to stagnate at best. Average costs per seat are also expected to remain stable - even though ground staff are fighting for higher salaries with a strike this Thursday and Friday and there is also a threat of a walkout among flight attendants.
Shareholders receive dividend again
At Group level, Spohr is targeting an adjusted operating profit for 2024 at the same level as 2023 - and therefore again around EUR 2.7 billion. At the same time, he wants to further expand the total number of seats with additional new aircraft. Nevertheless, according to the plans, it should only reach around 94% of the pre-corona level from 2019. Last year, it was reportedly 84%.
After several zero dividends as a result of the pandemic, shareholders can once again expect a dividend for 2023. The Group earned almost 1.7 billion euros on the bottom line, more than twice as much as a year earlier. Shareholders are to receive a dividend of 30 cents per share. The last time Lufthansa distributed part of its profit was in 2018 - at that time, the dividend was 80 cents per share.
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