After turning positive in 2022, Lufthansa is relying on higher capacities
Deutsche Lufthansa AG LHA,
is working to add capacity after turning profitable for the fourth quarter and for all of 2022, as it expects demand for air travel to remain strong after years of restrictions and border closures that have crippled the industry .
The German carrier group on Friday reported net income of 791 million euros ($838.2 million) for the year and 307 million euros for the fourth quarter. The company was in the red in 2021 with an annual loss of 2.19 billion euros and a loss of 314 million euros in the fourth quarter.
Travel restrictions and border closures brought international traffic to a near standstill at the height of the Covid-19 pandemic. Now airlines are scrambling for planes to add capacity to meet the increasing demand for international air travel.
Lufthansa said on Thursday it had ordered 22 long-haul aircraft worth around $7.5 billion at list price from Airbus SE and Boeing Co., to be delivered from the middle of the decade.
So far, the airline has placed orders for 10 Airbus A350-1000s, five Airbus A350-900s and seven Boeing 787-9s, although it is in advanced talks to acquire more long-haul aircraft. Lufthansa also plans to reactivate four A380s, the world’s largest passenger aircraft, on routes to the United States from July.
The airline is set to receive a total of 108 long-haul aircraft over the next few years as it retires six older aircraft types, including the Boeing 747-400, Airbus A340-600 and A340-300.
Lufthansa served 102 million passengers last year, more than double the number in 2021.
Fourth-quarter revenue increased 52% to €8.88 billion. Adjusted earnings before interest and taxes – Lufthansa’s preferred profitability measure – amounted to 575 million euros with an adjusted loss of 42 million euros. The Group expects a significant improvement in adjusted EBIT this year.
Analysts had forecast net income of 875 million euros for the year and 386 million euros for the fourth quarter on sales of 9.21 billion euros and adjusted earnings of 605 million euros, according to consensus provided by the company.
According to Lufthansa, demand for air travel is particularly robust for the upcoming Easter and summer holidays, with Spain, Italy, Greece and other Mediterranean countries proving to be the most popular destinations, while demand for flights to and from North America is also high.
The airline expects capacity to increase by an average of about 85% to 90% this year compared to 2019, but anticipates congestion in the European air transport system.
Write to Mauro Orru at firstname.lastname@example.org; @MauroOrru94
https://www.marketwatch.com/story/lufthansa-banks-on-higher-capacity-after-swing-to-profit-update-910676c3?siteid=yhoof2&yptr=yahoo After turning positive in 2022, Lufthansa is relying on higher capacities