Lufthansa is looking to cut costs, including in management, after repeated strikes weighed heavily on Q1 figures. But with the disputes settled and a busy summer anticipated, the CEO touted an imminent “turning point.”
Germany’s flagship airline convened at its Frankfurt HQ for its annual general meeting on Tuesday, releasing first quarter data for 2024 showing increased losses that it attributed in large part to repeated strikes in Germany in recent months.
Negative EBIT of €849 million, almost half of that attributed to strikes
Lufthansa’s adjusted earnings before interest and tax (EBIT) for the first quarter tracked a loss of €849 million (roughly $908 million), more than three times its figure from the first quarter of 2023.
The airline estimated that €350 million or so could be attributed to strikes in Germany impacting its services.
Lufthansa said it was taking steps this year to try to contain costs in response to the weak first quarter.
“Among other things, there are plans to reduce operating costs, stop new projects, and to consider some administrative positions,” the airline said.
However, turnover was up 5% compared to the first quarter of 2023 and passenger numbers also rose by 12%, pointing to some degree of recovery for the industry.
CEO Carsten Spohr sought to emphasize the positives.
“Today, we’re leaving the first quarter behind us, which was primarily encumbered by strikes, and we stand at a turning point,” Spohr said. “For the majority of our staff we have reached long-term pay deals. That means security and clarity for the coming years.”
Strong summer anticipated, airline expects annual profits
The first quarter tends to be a seasonally weak one for Lufthansa, even in more normal years, with travel typically more muted in the northern hemisphere’s winter and after the Christmas break.
The airline reported high demand privately for travel, with the COVID concerns and travel restrictions of recent years that brought almost all airlines to the brink of collapse fading ever further into memory.
It also said demand for business travel was increasing. CEO Spohr said the long-haul sector was recovering particularly rapidly.
The Lufthansa group, including its subsidiaries, expects to offer 92% of the flight services this year that it had in 2019, before the pandemic, down slightly from its target of 94%.
“Passenger numbers on our planes remain consistently high. It’s already clear: It will be a strong travel summer once again,” Spohr predicted.
Advanced bookings for the peak summer season were up 16% on this time the previous year, the airline reported.
It predicted an annual adjusted EBIT of €2.2 billion, down from its previous prediction of €2.7 billion.
Source: Dw
