Lufthansa Group reported a "financial turnaround" in 2022 with revenue doubling to almost €33bn as its cargo and maintenance operations achieved "record results".
The group recorded its highest-ever adjusted free cash flow after passenger numbers doubled to over 100 million. Adjusted earnings [EBIT] came to €1.5bn and net income was €791 million, which the group said was a "significant improvement on the previous year" when a loss of around €2bn was recorded.
Passenger airline revenues increased by 148% year-on-year to €22.8bn while "strong demand and continued limited capacity" meant average yields increased significantly to 16% higher than 2019. with the increase in the fourth quarter amounting to 21 percent.
Group carriers SWISS and Austrian Airlines generated an operating profit of €476 million and $3 million respectively. Brussels Airlines reported a loss of €74 million, but with revenue up 117% to around €1.2bn.
Lufthansa Cargo yields were 21% higher overall than in the previous year and 136% above the pre-crisis level of 2019, while EBIT rose 7% year-on-year to a record €1.6bn euros. Lufthansa Technik's earnings increased to a record €511 million as the lifting of Covid curbs saw aircraft back in service and needing maintenance.
Net capital expenditures increased to €2.3bn while adjusted free cash flow reached an all-time high of €2.5bn, up from €1bn in 2021. The group said it "has decided to maintain liquidity in the range of €8bn to €10bn to better protect itself against potential future crises", with €10.4bn reported at the end of 2022 after the remaining government aid in Austria and Belgium was repaid. Shareholder equity almost doubled to €8.5bn, with financial leverage, or the sum of net debt and net pension liabilities over adjusted EBITDA, at 2.3, below the 2019 level of 2.8.
"Lufthansa is back. In just one year, we have achieved an unprecedented financial turnaround," said chief executive Carsten Spohr.
"Demand for air travel remains high in 2023. We are investing billions in new fuel-efficient and state-of-the-art aircraft. With innovative services, a new premium cabin on board, and new digital tools, we want to remain the quality and innovation leader in our industry," he added.
The group said it has almost finished its "ambitious transformation and cost reduction programme", with which it aims to save €3.5bn per year by 2024.
"The company continues to evaluate the sale of non-core assets. AirPlus and LSG's remaining catering business, following the sale of the European part, will be sold as soon as market conditions permit. Preparations for a possible partial divestiture of Lufthansa Technik are proceeding according to plan as talks with selected investors have already begun," the group announced.
"I have always made it clear that returning to a strong balance sheet was one of our top priorities in overcoming the crisis," said Remco Steenbergen, the group's chief financial officer.
"Only a strong balance sheet provides the resilience needed to invest in the future of our business and to manage future crises. That is why I am extremely pleased with the progress made last year. We remain firmly committed to generating consistently strong free cash flows and continuing the deleveraging in 2023 and beyond," Steenbergen said.