Lufthansa Back on Track

The boom in the freight business and the ramp-up of passenger flights have given Lufthansa a surprisingly good result. The partially nationalized airline is heading for its pre-crisis level. Just a few days before the planned opening of the US borders to vaccinated EU citizens, Lufthansa presented a surprisingly good quarterly result. “With the increasing demand for business trips and a record result for Lufthansa Cargo, we were able to master another milestone on our way out of the crisis: the return to the black,” said Lufthansa boss Carsten Spohr, pleased.

However, the partially nationalized airline only managed to return to the black in operational terms: the adjusted operating result in the third quarter amounted to 17 million euros after a loss of 1.2 billion euros in the same period of the previous year. The MDAX group exceeded the expectations of the analysts, who had forecast an average of 33 million euros, but the bottom line was that Lufthansa continued to be in the red in the third quarter. At least she could reduce her minus significantly. The loss amounted to 72 million euros in the months from July to September after a loss of 2.0 billion euros in the same period of the previous year.

Lufthansa Cargo with record result The result in the cargo business was positive: The logistics division was able to increase its adjusted operating result from 169 million euros in the previous year to 301 million euros. This result is a record in the history of Lufthansa Cargo for this period. As in the previous quarters, Lufthansa Cargo profited from the sustained high demand in the global air freight market, which is further intensified by bottlenecks in ocean freight and the disruption of global supply chains according to the press release.

New bookings at 80 percent of the pre-crisis level While the Lufthansa Group has not only reached its pre-crisis level in the cargo business, but even exceeded it, the passenger business is not yet quite as smooth. After all, in the third quarter the airline was able to increase the number of seat kilometers offered to 50% of the pre-crisis level from 2019. With 19.6 million passengers in July, August and September, Lufthansa achieved 46 percent of its pre-crisis level. New bookings increased significantly, supported by the opening of further important long-haul markets for travelers from Europe, especially the USA. They are currently back at around 80 percent of the pre-crisis level.

US restart is getting closer From Monday, after a 20-month ban in the US, entry for vaccinated and additionally tested EU citizens will be possible again. There are currently around 200 connections to 17 US destinations in the weekly flight schedule of the Lufthansa Group, which also includes Swiss, Austrian, Eurowings and Brussels Airlines. Of course, Lufthansa never completely gave up its flights to the USA, as US citizens, diplomats and other groups of people were allowed to continue flying in addition to the cargo. Meanwhile, Lufthansa is also moving financially further out of the crisis: on October 5, the airline had one Capital increase completed, with which it had raised 2.16 billion euros in fresh capital to repay state aid. The remaining share of the German economic stabilization fund amounts to 14.09 percent of the total capital.

The Lufthansa share reacted with price gains to the presentation of the quarterly figures. On the Tradegate trading platform, it gains 1.6 percent in early trading to 6.04 euros, but the overall downward trend since March 2021 remains in place. On the stock market, too, it will take a while to return to pre-crisis levels. For comparison: two years ago a Lufthansa share was worth more than 11 euros.

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Lufthansa Back on Track - /10

Summary

The boom in the freight business and the ramp-up of passenger flights have given Lufthansa a surprisingly good result.

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