Lufthansa returned to annual net profit in 2022 after two years of Covid losses
Frankfurt (Germany) (AFP) - German airline Lufthansa said Friday that it returned to annual profit in 2022 after two years of pandemic-related losses, but worries lingered over the prospect of another chaotic summer season.
The group reported a net profit of 791 million euros ($839 million) after a loss of 2.2 billion euros in 2021 and 6.7 billion euros the previous year.
“Lufthansa is back,” said the company’s CEO Carsten Spohr, who was appointed to another five-year term this week after steering the group through the coronavirus crisis.
“In just one year, we have achieved an unprecedented financial turnaround,” he said.
The group’s adjusted operating profit came in at 1.5 billion euros, in line with analysts’ expectations.
When the coronavirus brought global air travel to a halt, Lufthansa suffered massive losses and had to be bailed out by the German government in 2020.
But as vaccines were rolled out and countries began lifting travel and other restrictions, the airline – one of Europe’s biggest – benefited from pent-up demand and has bounced back faster than expected.
The profits came despite surging costs, particularly for fuel, following Russia’s invasion of Ukraine, and were underpinned by record performances from the group’s cargo and maintenance subsidiaries.
The cargo subsidiary posted operating profits of 1.6 billion euros while maintenance raked in 511 million euros.
That helped offset the full-year operating losses booked by the group’s airlines – Lufthansa, Eurowings, Austrian, Swiss and Brussels Airlines – which were hit by Covid disruptions at the start of the year.
But demand soared later in the year, and overall 102 million passengers flew with Lufthansa’s airlines, more than twice as many as in 2021.
- ‘Bottlenecks’ -
Lufthansa boss Carsten Spohr said surging demand overwhelmed Europe's aviation systems last summer
Spohr conceded however that the “boom in demand” had led to Europe’s aviation sector becoming overwhelmed in the key summer holiday season.
Many airlines cancelled flights across the continent last summer and there were scenes of chaos at airports as they struggled to cope with the surge in passengers.
While 2022 was “the biggest financial turnaround in our company’s history… our joy about the past year cannot be entirely undimmed,” Spohr told a press conference.
He predicted continued strong demand this year and said Lufthansa was prioritising a hiring drive to help ensure the “stability and reliability of European air traffic in the coming summer”.
Lufthansa also warned of continued “bottlenecks” in Europe as airlines race to recruit staff who were let go or quit during the pandemic.
The threat of further strike action also looms large.
Last month, workers at eight German airports walked out demanding better pay as surging inflation erodes incomes, prompting Lufthansa to axe more than 1,300 flights alone at its busiest hubs, Frankfurt and Munich.
Lufthansa pilots, who went on strike last year, have agreed to suspend industrial action until the end of June as part of a pay deal.
But they could still stage industrial action this summer, and there is also a risk that airport ground staff could walk out again if their demands are not met.
With regards to Lufthansa’s bid to take over Italy’s troubled ITA Airways, Spohr declined to go into detail on the latest developments but said talks were “very constructive and positive”.
In January, the group submitted a fresh offer for ITA that would see the carrier initially take a minority stake in state-owned ITA – the successor to the iconic but loss-making national carrier Alitalia – with the option to later purchase the remaining shares.
The German group hopes to turn Rome into a key European travel hub, including by offering direct flights to Italy from the United States, its biggest market.
Lufthansa’s shares were up more than five percent on the Frankfurt Stock Exchange at midday.