Tourexpi
Carsten
Spohr, Chairman of the Executive Board and CEO of Deutsche Lufthansa AG:
“Today,
we are reporting on another strong summer travel season, with a record seat
load factor of 88 percent in August. Particularly in view of the fact that
global air traffic again reached its capacity limits this summer, I would like
to thank our employees for their efforts and our customers for the patience we
sometimes had to ask for.
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.
With
all passenger airlines operating at a profit, Eurowings, Austrian Airlines and
Brussels Airlines even generated record results in the third quarter. Lufthansa
Technik and Lufthansa Cargo also remain on track.
At
the same time, delayed aircraft deliveries, punctuality issues at our hubs in
Germany and regulatory disadvantages are impacting our core brand. Lufthansa
Airlines has therefore launched the “Turnaround” program to address these and
structural internal challenges.
Across
the group, we are continuing to invest in the largest fleet modernization in
our history, in premium offers for our guests and in an even more international
positioning. These three central pillars of our strategy will enable us to
further expand our role as the leading airline group in Europe.”
Results
The
Group increased its revenue by five percent year-on-year to 10.7 billion euros
(previous year: 10.3 billion euros) in the third quarter due to the higher
number of flights and the revenue growth at Lufthansa Technik. This was the
strongest quarter in terms of revenue in the history of the Lufthansa Group.
The Group generated an operating profit (Adjusted EBIT) of 1.3 billion euros
(previous year: 1.5 billion euros), resulting in an operating margin of 12.5
percent (previous year: 14.3 percent). The year-on-year decline was due to
significant cost increases, particularly in fees, MRO expenses and personnel.
Net profit fell to 1.1 billion euros (previous year: 1.2 billion euros).
Lufthansa
Group Passenger Airlines expand capacity
The
Lufthansa Group airlines welcomed more than 40 million guests on board their
aircraft in the third quarter, an increase of six percent over the previous
year. At 94 percent of available capacity (prior-year period: 88 percent), the
seat load factor rose to 87 percent in the third quarter (previous year: 86
percent). In terms of the seat load factor, August was the strongest month in
the company's history, with a load factor of 88 percent.
Due
to the industry-wide capacity growth, average yields fell by 3.5 percent
compared to the previous year, although the development in the various traffic
regions was mixed: While average yields in continental traffic in the third
quarter remained almost at the previous year's level (-0.4 percent), they fell
significantly by 14 percent in the Asia/Pacific region. Due to the improved
passenger load factor, the decline in unit revenues (RASK) was less pronounced
at minus 2.7 percent. Unit costs increased by 4.5 percent compared to the
previous year due to higher fees, as well as higher material and personnel
costs.
Overall,
the Group's passenger airlines generated an Adjusted EBIT of 1.2 billion euros
in the third quarter (previous year: 1.4 billion euros). The decline in the
operating profit of the passenger airlines is mainly driven by the 234 million
euros decline in the result of Lufthansa Airlines. Delays in the delivery of
new aircraft and the associated need to continue operating older aircraft,
increased location costs, higher staff costs and expenses for compensation
payments following flight irregularities had an above-average impact on the
result of Lufthansa Airlines.
Turnaround
program at Lufthansa Airlines is making progress
Lufthansa
Airlines is consistently implementing its Turnaround program. The aim is to
increase efficiency, reduce complexity and improve product quality, thereby
making the airline fit for the future. Among other things, the Turnaround plan
envisages shifting more short-haul traffic to more cost-efficient flight
operations. Further efficiency gains are to be achieved by optimizing the
network and increasing flexibility and automation. By 2026, the measures will
have a gross EBIT effect of around 1.5 billion euros.
Till
Streichert, Chief Financial Officer of Deutsche Lufthansa AG:
“The
Lufthansa Group will continue to focus on generating cash flow and creating
value for our shareholders. For this, the Turnaround program at Lufthansa
Airlines and the fleet modernization are core elements. I am confident that on
this basis we will position all our passenger airlines to be sustainably
efficient and profitable.”
Lufthansa
Technik's result on par with last year, positive performance at Lufthansa Cargo
In
the third quarter, Lufthansa Technik continued to benefit from the high demand
for air travel and the associated increase in demand from airlines worldwide
for maintenance and repair services. Lufthansa Technik generated an Adjusted
EBIT of 167 million euros in the third quarter (previous year: 168 million
euros).
The
airfreight business continued to recover in the third quarter compared with the
previous quarter. Lufthansa Cargo achieved an operating profit of 38 million
euros (previous year: 1 million euros) in the traditionally seasonally weak
third quarter for air freight. This trend confirms the anticipated
normalization in the air freight market. Furthermore, Lufthansa Cargo is
optimally positioned to benefit from strong e-commerce business with Asia,
which has prompted Lufthansa Cargo to shift capacity from the transatlantic to
the Asia/Pacific region.
Adjusted
free cash flow clearly positive, balance sheet further strengthened
The
Lufthansa Group generated an operating cash flow of 635 million euros in the
third quarter of 2020 (previous year: 1.2 billion euros). After deducting net
capital expenditure, primarily for new fuel-efficient aircraft, the Group
recorded an Adjusted free cash flow of 128 million euros in the quarter. In the
first nine months, the Adjusted free cash flow was 1.0 billion euros (previous
year: 1.7 billion euros).
The
Group continued to strengthen its balance sheet during the first nine months of
the year, supported by the positive cash flow. At 5.1 billion euros, net debt
was below the year-end level 2023 (December 31, 2023: 5.7 billion euros). Net
pension liabilities decreased to 2.6 billion euros (December 31, 2023: 2.7
billion euros). Compared to the beginning of the year, available liquidity
increased by around 1 billion euros to 11.4 billion euros and was therefore
well above the target range of 8-10 billion euros as of the reporting date.
Outlook
The
Lufthansa Group expects demand for air travel to remain strong in the remaining
months of the year. The load factors booked for November and December are well
above the levels observed at the same time last year. Demand remains
particularly high in the premium classes, i.e. Business Class and First Class.
The
Lufthansa Group plans to increase its capacity in the fourth quarter further
compared to the previous year. For the full year 2024, it expects a capacity of
around 91 percent compared to the pre-crisis level.
The
Group also expects to report a positive operating result in the fourth quarter.
Overall, the Lufthansa Group is therefore confirming its expectation of
achieving an Adjusted EBIT of 1.4 to 1.8 billion euros for the full year.
Further
information
Further
information on the results of individual business segments will be published in
the report for the third quarter of 2024. This will be published at the same
time as this press release on October 29, 2024, at 7:00 a.m. at
https://investor-relations.lufthansagroup.com/en/investor-relations.html.
The
traffic figures for the third quarter of 2024 will also be published at 7:00
a.m. at https://investor-relations.lufthansagroup.com/en/financial-reports-publications/traffic-figures.html
Image
Credit: © Lufthansa Group
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