Lufthansa Group Registers €1.1bn in Q3 Operating Profits

DALLAS - Frankfurt-based Lufthansa Group (LH) made an operating profit of €1.1bn in the third quarter of this year, thanks largely to passenger air travel demand remaining strong.

More than 33 million passengers used the airlines of the Lufthansa Group between July and September, compared to 20 million last year, according to the Q322 report.

As a result, the Lufthansa Group joined global airlines' return to profitability in the third quarter with an adjusted free cash flow of €410m (US$408.5m). Earnings for passenger airlines also rose, and logistics and MRO had record performance.

The CEO of Deutsche Lufthansa AG, Carsten Spohr, stated that the group "had a very impressive performance in the third quarter, proving its recovered profitability with an operating profit of over one billion euros."

He continued to say that this achievement resulted from the efforts of all business units, including passenger airlines, logistics, and MRO. “This demonstrates the quality of our portfolio once more. Financially, the Lufthansa Group has moved past the pandemic and is hopeful about the future.”

He noted that there will always be a demand for air travel and that they are currently focusing their attention on the future and introducing the largest product rejuvenation in history. “We are purchasing 200 new aircraft and providing opportunities for all of our personnel worldwide. We still want to enhance our standing among the top 5 airline groups in the world,” Carsten pointed out.

Third Quarter Results in Brief

In the third quarter, the Lufthansa Group's revenue doubled from the same period last year (+93%), reaching €10.1bn (US$10bn), up from last year's total of €5.2bn (US$5.1bn).

The report states that the third quarter's outflows as a result of the seasonal decline in bookings were partially offset by the good operating performance and the effects of structural improvements in working capital management. 

In Q322, the company achieved adjusted earnings before interest (EBIT) of €1.1bn (US$1.25bn), which included a strike-related impact of about €70m (US$69.7m). Operating profit for the same time last year was €251m (US$250m). The operating margin stood at 11.2%, up from 4.8% in 2021. The third quarter also saw a considerable increase in net income, reaching €809m (US$806m).

The uptick in travel demand resulted in the group's passenger airline sector being restored to profitability with an adjusted positive EBIT of €709m (US$706m) due to high demand and solid average yields. While each airline in the group made an operating profit, costs related to air traffic abnormalities totaling €239m (US$238m) weighed down the overall third-quarter performance.

For its part, Lufthansa Cargo has made an operational profit of €1.3bn (US$1.295bn) thus far this year, and it is on track to surpass last year's record full-year profit of €1.5bn (US$1.495bn).

The Lufthansa Group is increasing its earnings outlook for the group as a whole in light of these encouraging developments. LH also said in its Q3 report that it was on track to meet its medium-term goals for 2024, which include an adjusted EBIT margin of at least 8% and an adjusted ROCE excl. cash of at least 10%.

Featured image: Lufthansa A380 D-AIME Frankfurt. Photo: Christian Winter/Airways