For 1Q24, Lufthansa Group recorded a preliminary Adjusted EBIT loss of €849 million, compared to last year’s loss of €273 million.
The current loss was higher than expected due to strikes by different employee groups within the Group and by employees at system partners, which impacted earnings by around €350 million. The Group’s Adjusted free cash flow was €305 million, mainly due to continued high inflows from advance ticket payments.
The Group outlook for 2Q24 will be lower than last year. An additional €100 million is expected to negatively impact the result because of the effects of the settled wage disputes, particularly at Lufthansa Airlines, on short-term travel booking demand and ongoing conflicts at Austrian Airlines.
In addition, the ramp-up of capacity in the second quarter is forecasted to be slightly lower than initially planned to support improvements in punctuality and because of delays in new aircraft deliveries. (delayed deliveries are now the bane of all airlines) Overall, incoming bookings align with original expectations, especially for the summer holiday period, helping the Group’s forecast for the year’s second half. Results are expected to be higher in the second half of the year than last year.
Adj. EBIT of around €2.2 billion is now expected for the year (previously: stable earnings development compared to €2,682 million in the previous year). Adjusted free cash flow will likely be at least €1 billion (previously: at least €1.5 billion).
The as-yet unforeseeable effects of the recent escalation of the Middle East conflict and further geopolitical uncertainties pose risks to the Group’s full-year financial outlook. The Group will provide additional details on the financial outlook when it publishes its final results for the first quarter on 30 April.
Lufthansa is also offering concessions to move forward with its ITA deal. The report from Lufthansa Group likely signals what should be expected from all the large EU airline groups.
