Lufthansa has reported strong earnings across its board. On March 3, the Group published a press release, revealing that it has achieved a financial turnaround in 2022.
1. A Financial turnaround in 2022
Lufthansa doubled its revenue from €16.8 billion to €32.8 billion during the 2022 financial year, and its EBIT (Earnings Before Interest and Taxes) jumped from -€1.7 billion to €1.5 billion. The Group expects further significant improvement of adjusted EBIT for 2023.
Carsten Spohr, CEO of Deutsche Lufthansa AG, said that his company has achieved a “financial turnaround,” and highlighted that the group has achieved “a much better result than expected.”
Lufthansa is back. In just one year, we have achieved an unprecedented financial turnaround. With an operating profit of 1.5 billion euros, the Lufthansa Group has achieved a much better result than expected.
Carsten Spohr, CEO of Deutsche Lufthansa AG
2. Increased demand for air travel
The increased revenue is due to the strong increase in demand for air travel. During the last year, significantly more passengers flew with the airlines of the Lufthansa Group than in 2021. Passenger numbers more than doubled: The group’s airlines welcomed over 100 million passengers on board.
Following the strong increase in demand for air travel, Lufthansa significantly expanded the number of offered flights over the course of 2022. Passenger airline revenues increased by 148% year-on-year to 22.8 billion euros in the financial year 2022 (previous year: 9.2 billion).
Adjusted EBIT at Passenger Airlines improved significantly in the past fiscal year, at an operating loss of -300 million euros (previous year: -3.3 billion euros).
3. Lufthansa cargo and ‘technik’ record results
The logistics segment also continued registering a positive trend. In 2022, Lufthansa Cargo benefited from the persistently high demand for airfreight. Yields increased in all traffic regions of Lufthansa Cargo and were 21% higher than in the previous year.
Yields were 136% above the pre-crisis level of 2019, and the adjusted EBIT rose by 7% year-on-year to 1.6 billion euros (previous year: 1.5 billion euros): a record in Lufthansa cargo’s history.
Lufthansa Technik also registered record results thanks to the strong growth in demand for air travel and for maintenance and repair services. In the financial year 2022, adjusted EBIT improved by 41% year-on-year to 511 million euros.
4. 2023 Outlook
Demand for air tickets is expected to remain strong in the current year, particularly during the Easter and summer vacation periods. The most popular destinations are Spain, Italy, Greece, and other Mediterranean countries. Passenger Airlines will also benefit from high demand for flights to and from North America.
Thanks to this strong demand, capacities for passenger flights will be expanded. Capacity is expected to increase to around 85 to 90% on average compared with 2019.
In the Logistics segment, Lufthansa expects a significant decline in revenue due to the further normalization of the airfreight market. However, freight rates are expected to remain above the pre-crisis level in 2019. This means that the operating result in the Logistics segment will be down compared to 2021, but will remain well above the pre-crisis level.
As for Lufthansa Technik, the Group expects 2023 earnings to be at least on a par with the previous year.
