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Lufthansa Group announced its 2023 earnings with the third-best financial results in its history. These results come as the airline faces, yet again, industrial action by ground workers and other staff.
Lufthansa Group doubled its net profit from €791m to €1.67bn in 2023, and revenue rose from €30.9bn to €35.4bn. “With their above-average commitment, they made 2023 one of the three best years in Lufthansa Group’s history,” said Deutsche Lufthansa CEO and chairman of the executive board Carsten Spohr. Lufthansa will pay a dividend of €0.30 per share, its first dividend since 2019.
- SWISS revenues rose 23% to €5.9bn YoY. Operating income for 2023 was €6.2bn, with operating expenses at €5.4bn. Adjusted earnings before interest and taxes (EBIT) are up from -€466m last year to €854m in 2023.
- Austrian Airlines revenues rose 25% to €2.3bn YoY. Operating income for 2023 was €2.4bn with operating expenses at €2.2bn. Adjusted EBIT rose €3 million from 2022 to €127m in 2023.
- Brussels Airlines revenues rose 26% to €1.5bn YoY. Operating income for 2023 was €1.6bn, with operating expenses at €1.55bn. Adjusted EBIT rose from -€75m in 2022 to €53m in 2023.
- Eurowings revenues rose 40% to €2.59bn. Operating income for 2023 was €2.7bn, with operating expenses at €2.6bn. Adjusted EBIT rose from -€17m to €339m in 2023.
- Lufthansa Cargo reported revenue declined 36% from €4.6bn in 2022 to €3.98bn in 2023. Operating income for 2023 was €3bn, with operating expenses at €2.9bn. Adjusted EBIT declined 86% from €1.6bn in 2022 to €219m in 2023.
- IATA notes that in “normal times,” cargo delivers ~35% of the value of goods traded across borders. In the pandemic, air cargo brought medical supplies and vaccines to where they were needed. Today, it provides a vital transport alternative for some products as Red Sea shipping lanes face geopolitical uncertainty. In 2023, air cargo closed the year at near pre-pandemic performance levels.
Market reaction is muted. JP Morgan noted the results were “broadly in-line; nothing particularly bad nor exciting, with no major changes to 2024E consensus.”
Bloomberg notes concerns about looming labor strife, which is expected to impact 1Q24. The airline has already canceled over 1,300 flights in February because of strikes. Previously, the airline also had to meet its pilot union’s demands.
Lufthansa also faces challenges in Italy.
The Lufthansa Group expects revenue to “increase significantly in the 2024 financial year.” Perhaps, but first, there are several stormy clouds to navigate.
