DALLAS – Despite announcing “further significant improvement” in its profits, the Lufthansa Group has said it remains cautious, as various constraints threaten to hamper the industry in the coming months.
The group revealed an adjusted EBIT (earnings before interest and taxes) of €1.5bn (US$1.6bn) for 2022, up from a €1.7bn (US$1.8bn) loss in 2021. This is its first profit since the start of the pandemic.
Revenues almost doubled to €32.8bn (US$34.9bn), powered by a rise in passenger numbers. Yields across the group were also 16% above 2019 levels.
“Unprecedented Financial Turnaround”
“Lufthansa is back. In just one year, we have achieved an unprecedented financial turnaround. With an operating profit of €1.5 billion, the Lufthansa Group has achieved a much better result than expected,” Group chief executive Carsten Spohr said.
However, Spohr added that capacity growth “will be limited by the bottlenecks still expected in the European aviation system.” It also warned that capacity levels for Q1 2023 will still only be around 75% of pre-pandemic levels.
Lufthansa (LH) has recently cut its summer 2023 schedule, cutting several flights in an attempt to ease disruption. Its Frankfurt (FRA) hub capacity will be around 85% as it is “more challenged by constraints than other hubs in our system,” Spohr explained.
Supply Vs. Demand
Spohr, who also recently had his contract as group CEO extended for another five years, also explained that the balance between supply and demand had yet to match. “Our industry is driven to a high degree by the balance between supply and demand. If you see, at least in our networks, we are not anywhere close to 100% capacity yet, but the world more or less is growing towards 100% demand,” he said.
“We cannot fill that gap on the supply chain side, because of various restrictions like lack of staff, lack of infrastructure, lack of planes, lack of spare parts, lack of engines.”
Featured Image: Lufthansa Airbus A340-313 (D-AIGU). Photo: Marty Basaria/Airways.