Pilot strikes or bottlenecks in ground staff do not keep Lufthansa’s balance sheets on the ground. On the contrary: After a strong summer, the airline is looking to the future with optimism and is raising its profit target for 2022.
After a surprisingly strong summer quarter, Lufthansa expects a profit in the billions in day-to-day business this year. While many pilots of the low-cost subsidiary Eurowings are on strike and hundreds of flights are cancelled, the Group Executive Board around Lufthansa CEO Carsten Spohr is doubling its forecast for 2022. Adjusted operating profit (adjusted EBIT) should exceed the one billion euro mark, as the company announced. The group cited the strong demand for tickets and another record result from the freight subsidiary Lufthansa Cargo as reasons.
The news was well received on the stock exchange. The price of the Lufthansa share reached its daily high after the news with an increase of 4.6 percent. However, the profits quickly crumbled off again. At the close of trading, the paper was up 1.57 percent.
With its profit forecast, the Lufthansa Executive Board exceeded the average expectations of analysts. At the beginning of August, CEO Spohr raised his target to more than 500 million euros. Industry experts had recently assumed an average of a good 800 million euros.
But the important summer business went better than expected for the group, despite strikes by ground staff and pilots. According to preliminary figures, the group achieved sales of 10.1 billion euros in the third quarter, almost twice as much as in the corona-ridden summer of 2021. Adjusted operating profit was 1.1 billion euros, more than four times as high as in the same period last year. Analysts had expected a good 900 million euros. The strikes impacted earnings by around 70 million euros.
Lufthansa, like Eurowings, had to thin out the flight program in the summer due to bottlenecks at many airports. Ground staff and pilots paralyzed the flight operations of the main Lufthansa brand on a daily basis – and enforced significant salary increases with their outstanding payments. In October, the pilots of the German subsidiary of Eurowings followed suit with their own strikes. Your current walkout is expected to last from Monday to Wednesday.
With its doubled profit forecast, the Lufthansa management was nevertheless confident for 2022. The booking situation shows strong demand for air travel for the coming months. In addition, the management expects another record result at Lufthansa Cargo. The freight division had achieved an adjusted operating profit of almost 1.5 billion euros in 2021 – more than ever in its history. Lufthansa intends to present its full quarterly figures on October 27th.
