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Lufthansa gives optimistic outlook as price hike survives disruption

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Deutsche Lufthansa AG’s projected profit will continue to grow in the coming months on the back of booming demand, even as staff shortages prompt airports to limit capacity.

Europe’s largest airline group said it expected a “significant increase” in profits in the third quarter compared to the second. That’s after high ticket prices and record profits in the company’s freight division more than offset increases in fuel costs in the second quarter.

Lufthansa also gave a clearer outlook for full-year profit, forecasting adjusted earnings before interest and taxes of more than 500 million euros ($508.2 million). The airline previously said only that it expects an improvement in 2022 compared to last year.

As travelers across Europe grapple with flight disruptions amid staff shortages and a wave of strikes, the region’s airlines are making money again as travel recovers from the Covid crisis. Capacity caps put in place to avoid late cancellations may have hurt passenger numbers, but they’ve also raised fares in a business where demand was already close to matching supply.

After reducing its workforce during the pandemic, Lufthansa announced it would hire around 10,000 new employees over the next 18 months to offset travel disruptions.

“We steered our company together through the pandemic and thus through the worst financial crisis in our history,” said CEO Carsten Spohr on Thursday. “Now we have to further stabilize our flight operations.”

Lufthansa reported adjusted earnings before interest and taxes of EUR 393m for the second quarter.

Competitors Air France-KLM and British Airways’ parent company IAG SA posted positive earnings last week for the first time since global travel was hit by the pandemic. The former plans to ramp up capacity to pre-coronavirus levels in the final three months of 2022, while IAG is forecasting higher profits and positive full-year results this quarter.

https://www.independent.ie/business/world/lufthansa-gives-upbeat-outlook-as-fare-surge-survives-disruption-41889022.html Lufthansa gives optimistic outlook as price hike survives disruption

Fry Electronics Team

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