Rachel Mohr and Joanna Plucinska
BERLIN/LONDON (Reuters) – Lufthansa hopes to recoup strike-related losses in the second half of the year, the German carrier said on Tuesday, pointing to a strong summer season with bookings up 16% from the previous year.
The first quarter is often unprofitable for airlines due to fewer orders. However, Lufthansa’s losses are compounded by ongoing strikes in Germany, which cost the group €350 million in the first quarter.
The airline reiterated its full-year adjusted earnings before interest and tax (EBIT) forecast of 2.2 billion euros ($2.3 billion), which was revised down two weeks ago after a wave of costly strikes sent shares tumbling.
He added that profit in the second quarter will be lower than the previous year.
But hopes are growing that summer demand will make up for losses in recent months as Europe braces for one of its busiest travel seasons since the coronavirus pandemic.
The group’s operating result in the second half of the year is expected to be higher than the previous year, he said, adding that cost-saving measures were planned at its core Lufthansa Airlines brand to prevent heavy losses there from strikes.
“We are now leaving behind the first quarter, which was mainly affected by strikes, and are at a turning point,” said CEO Carsten Spohr.
“Our planes are still well filled. One thing is already clear: it will be another very strong summer,” he added.
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However, given the decline in capacity in the first half of the year, the group now expects a slower return to pre-crisis levels, raising its 2024 capacity forecast to 92% from the previous 94%.
The division’s revenue will also decline slightly year-on-year in the second quarter as strikes kept customers off short-term flight bookings in April and May.