Lufthansa Group revenue increased by 40% to €7.0 billion during the first quarter of 2023, with an improvement in adjusted earnings (EBIT) to a loss of €273 million compared to a loss of €577 million in the prior year. Lufthansa Group’s net loss decreased by 20 percent to €467 million.
The group’s number of passengers increased significantly to 22 million, with an average yield some 19 percent above 2019 levels.
"The Lufthansa Group is back on track,” said Carsten Spohr, CEO of Deutsche Lufthansa. “After a good first quarter in which we were able to significantly improve our result, we now expect a travel boom in the summer as well as a new record in our traffic revenue for the year as a whole. On short- and medium-haul leisure-oriented routes, demand is already exceeding 2019 levels.”
Sphor added that the Lufthansa Group “is well positioned to further strengthen its position among the top five airline groups in global competition”.
The Lufthansa Group noted that there was a continued high demand for flight tickets - especially in the private travel segment – owing to high pent-up demand following the pandemic which the airline said the high booking inflow for the summer months in the first quarter of the year “clearly demonstrates”.
The group said that although the result for the period was still negative, it was mainly due to normal seasonality costs including ramping up for the summer season. “Costs for the planned expansion of flight operations in the summer, investments in operational stability, and the effects of various strikes at German airports (in which the Lufthansa Group was not a negotiating partner) also weighed on earnings” said the airline, adding that its operating loss was halved compared to the previous year.
With group airlines serving 22 million passengers on board between January and March, compared to the previous year of 13 million, capacity was significantly expanded to 75% of the pre-crisis level in 2019 due to sustained high demand.
Passenger airline revenue rose by 73% in the first quarter to €5.2 billion with 19% higher yields in the first quarter than in 2019, and 25% higher yields on long-haul routes.
Lufthansa Cargo generated an Adjusted EBIT of €151 million in the first quarter, down on the previous year of €495 million, which was a result of “the market-wide normalization of air freight rates”.
Lufthansa Technik improved its results in the first quarter of 2023 compared to the same period of the previous year (see Maintenance section below).
The LSG Group's result for the first quarter was a loss of €6 million with revenue up by 40% to €523 million. On April 5, Deutsche Lufthansa signed an agreement with the private equity company AURELIUS on the sale of the LSG Group. The transaction is expected to close in the third quarter of 2023.
Lufthansa Group’s operating cash flow increased to €1.6 billion in the first quarter of 2023, which was offset by increased net capital expenditure of €1.0 billion mainly related to advance payments for future aircraft acquisitions, capitalized large maintenance events, and final payments for six aircraft received, including those already scheduled for delivery in the fourth quarter of the prior year. As a result, adjusted free cash flow decreased to €482 million.
At the end of March 2023, the company had liquidity of €10.5 billion available.
"The continuously strong demand gives us confidence for the coming months,” said Remco Steenbergen, Chief Financial Officer of Deutsche Lufthansa. “The summer travel season will provide a major contribution to achieving our targets for 2023. At the same time, we will continue to invest in operational stability to offer our customers a smooth travel experience, even if this means that we are currently operating at a much lower efficiency and productivity level than originally planned. I am all the more convinced that we still have great potential to increase our earnings beyond 2023 once we leave the ramp-up phase behind us and the overall system gains further stability."
In the second quarter, Lufthansa Group expects capacity to increase to around 82% of the pre-crisis level. Based on the current booking situation, the company expects yields in this period to be up to 25% higher than in 2019. Adjusted EBIT in the second quarter of 2023 is thus expected to be higher than the second quarter result of 2019, which amounted to €754 million.
For the full year 2023, the Lufthansa Group still expects an average passenger airline capacity of around 85 to 90 percent compared to 2019.