Lufthansa, still Europe’s largest airline group, has downgraded its financial outlook 2024 and announced a “recovery plan”. After a disappointing first half year, the group, which in addition to Lufthansa includes Austrian, Swiss, Eurowing, and Brussels Airlines, among others, now expects an operating profit of between 1.4 billion and 1.8 billion euros in 2024, down from the 2.2 billion euros projected so far.
Lufthansa says it is “launching a major recovery program,” but the group does not provide more details, which is expected by the end of the month.
Negative market trends
In passenger traffic, the group’s core business, “it is becoming increasingly difficult for Lufthansa Airlines to break even for the full year,” the press release states.
Lufthansa is particularly affected by the challenges posed by negative market trends and the inefficiencies of Lufthansa and Cityline flight operations, which are also due to delayed aircraft deliveries.
In the second quarter, Lufthansa realized an operating profit of 686 million euros, down from 1.1 billion in the same quarter a year ago. The nearly 40% drop is due to a “decline in average revenue” per passenger in all regions, especially Asia. The ban on flying over Russian airspace has also made it more difficult for Lufthansa to operate its Asia routes competitively.
Passenger traffic accounted for an operating profit of 213 million euros in the second quarter, 300 million less than in the same period in 2023.
Loss due to strikes
The profit in the second quarter could not offset the first quarter’s loss due to strikes among group employees and airport air traffic controllers.
For the first half, passenger traffic posted an operating loss of 427 million euros. In the first half of 2023, when aviation recovered from the coronavirus pandemic, there was still a profit of 149 million euros.
In early July, the European Commission ruled that the Lufthansa Group could enter the capital of its Italian sector partner, ITA Airways, the successor to Alitalia.
The acquisition will allow the German group to expand its access to the Italian market, the third largest in the EU. It is unclear whether ITA’s figures are also included in the annual statistics.
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