By Mauro Orru
Deutsche Lufthansa reported earnings ahead of analysts’ expectations for the third quarter after what it called a record summer, and said it expects demand for air travel to remain strong in the coming months, even in premium cabins.
The German carrier group on Thursday posted revenue of 10.28 billion euros ($10.87 billion) for the three months to the end of September, up 8% on year. The group’s airlines, which include Swiss, Austrian Airlines, Brussels Airlines and Eurowings aside from the eponymous Lufthansa, carried more than 38 million passengers in the quarter compared with 33 million in last year’s third quarter.
“Even though the geopolitical situation remains challenging, our booking outlook gives us reason to be positive–not only for a very good group result this year, but also beyond,” said Chief Executive Carsten Spohr.
The group said the good demand it saw during the summer stretched into October, with passengers rushing to secure seats for the Christmas season. More than 80% of passengers that the group expects to carry in the fourth quarter had already booked their flight or flown in October.
Demand for both short-haul and long-haul flights, particularly among leisure travelers, remains high. Passengers are also continuing to book seats in business class and first class, Lufthansa said.
Net profit surged 47% to EUR1.19 billion in the quarter. Adjusted earnings before interest and taxes–Lufthansa’s preferred measure of profitability–climbed to EUR1.47 billion from EUR1.12 billion, generating a 14.3% adjusted margin.
Analysts had forecast revenue of EUR10.84 billion, profit of EUR1.04 billion and adjusted earnings of EUR1.43 billion, according to a company-provided consensus.
Lufthansa managed to reduce costs by 0.9% on year, but inflation continued to leave its mark on the carrier in the form of fees, personnel, and maintenance expenses as well as higher fuel costs in recent weeks.
“Despite high inflation, we were able to reduce our unit costs. However, we need to further improve our operational reliability and thus also our productivity and efficiency, which are still below pre-crisis levels,” said Chief Financial Officer Remco Steenbergen.
Lufthansa said it expects capacity in the current quarter to reach around 91% of 2019 levels, and confirmed its adjusted EBIT forecast for the year of more than EUR2.6 billion.
Write to Mauro Orru at mauro.orru@wsj.com
Read the full article here