Two of Lufthansa’s airlines remain unprofitable

Lufthansa's two airlines remain unprofitable despite a relatively positive quarter for the group
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Though Lufthansa has announced a record-breaking Q2 2023, two of its airlines have remained loss-making. 

Out of the group’s airlines, Lufthansa, Swiss International Air Lines, and Austrian Airlines were Earnings Before Interest and Taxes (EBIT) positive, while Brussels Airlines and Eurowings ended H1 2023 with a negative EBIT. 

Nevertheless, Lufthansa evaluated that its passenger airlines achieved a “positive result” during the period, considering that they welcomed 30% more passengers compared to the corresponding period in 2022 (55 million versus 42.4 million). Passenger capacity grew by 19% Year-on-Year (YoY) yet was still 21% lower than levels seen prior to the pandemic. 

The airline group had to manage its capacity conservatively, as it hoped to avoid the delays and cancelations that it suffered, like other airlines in Europe, during the summer of 2022. “This strategy was successful. Punctuality improved to 70 percent in the first six months,” Lufthansa noted. 

Lufthansa group’s adjusted EBIT swung almost €1 billion ($1.09 billion), as Lufthansa ended H1 2023 with an adjusted EBIT of €812 million ($888 million), while the previous year’s result was a negative adjusted EBIT of €185 million ($202.3 million). 

Overall revenues were €17.8 billion ($19.4 billion), with the group ending H1 2023 with a net profit of €414 million after taxes, plus losses from now-discontinued operations and losses attributed to minority interests. 

“Thanks to the great efforts of our employees, we were able to avoid a situation like last summer and once again offer our customers a more stable operation,” said Carsten Spohr, the Chief Executive Officer (CEO) of Lufthansa Group. Spohr noted that the group’s focus on stability “has proven to be the right choice for our customers, our employees and our shareholders”. 

During the same period, the company divested itself of its catering arm, LSG Group, and as well as selling the payment company AirPlus to Sweden’s SEB Kort Bank, marking a “milestone in the transformation process to an Airline Group”. 

“Our outlook indicates a continued positive development for customers, employees and shareholders: The specified profit forecast clearly shows that we are well on track to achieve the capital market targets we have set ourselves for the medium term,” Spohr concluded. 

According to the German executive, the company is “currently preparing to assume joint operational control and make ITA Airways profitable immediately upon after receiving regulatory approvals”. 

Lufthansa acquired a 41% stake in Italy’s ITA Airways for €325 million ($355.2 million) in May 2023. The German airline group has the option to acquire the remaining shares of the airline at a later date, with the price of that transaction being dependent on ITA Airways’ performance. 

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