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Germany’s Lufthansa says ‘left pandemic behind’ as passenger numbers spike

German airline giant Lufthansa said Thursday it had "left the pandemic behind" as it reported a robust third-quarter net profit, and predicted strong demand in the months ahead.

Passengers for Eurowings
Passengers check in for a Eurowings flight at Cologne airport. Photo: picture alliance/dpa | Thomas Banneyer

Lufthansa had made huge losses when the coronavirus brought global air travel to a halt, and had to be bailed out by the German government in 2020.

But a strong rebound in demand as economies reopen has lifted the company’s fortunes.

The net profit of €809 million from July to September compares to a loss of €72 million in the same period a year earlier.

CEO Carsten Spohr said the group had “left the pandemic behind and is looking optimistically into the future”.

“The desire to travel, and thus the demand for air travel, continues unabated.”

All business segments, from passenger airlines to logistics, contributed to the result, he said.

The results extend the group’s recovery, after it reported its first net profit in August since the pandemic.

Third quarter revenues almost doubled year-on-year to €10.1 billion.

More than 33 million passengers flew with the airlines of the group in the quarter, up from 20 million in the same period a year earlier.

The group’s passenger airlines returned to profitability, with an adjusted operating profit of €709 million, compared with a loss a year earlier.

More strong demand

Lufthansa said it believes air travel demand will remain strong in the months ahead, and it expects to make an operating profit in the fourth quarter despite the usual seasonal slowdown.

The group — which includes Eurowings, Austrian, Swiss and Brussels Airlines — had already announced earlier this month it was significantly raising its earnings forecast for 2022 due to strong demand.

It confirmed that it expected adjusted operating profits of more than €1 billion for the year.

The positive results came despite strike action by pilots and ground staff over the summer, which cost the group around €70 million during the July-to-September period.

Lufthansa made huge net losses of €6.7 billion in 2020 and €2.2 billion in 2021 due to the pandemic, but its finances have stabilised earlier than expected.

The German government sold its remaining stake in Lufthansa last month, putting the airline back in private hands.

READ ALSO: Flights cancelled in Germany as Eurowings three-day strike begins

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TRAVEL NEWS

UPDATE: When will Germany’s €49 ticket start?

Germany announced a €49 monthly ticket for local and regional public transport earlier this month, but the hoped-for launch date of January 2023 looks increasingly unlikely.

UPDATE: When will Germany's €49 ticket start?

Following the popularity of the €9 train ticket over the summer, the German federal and state governments finally agreed on a successor offer at the beginning of November.

The travel card – dubbed the “Deutschlandticket” – will cost €49 and enable people to travel on regional trains, trams and buses up and down the country.

There had been hopes that the discount travel offer would start up in January 2023, but that now seems very unlikely.

READ ALSO: What you need to know about Germany’s €49 ticket

Martin Burkert, Head of the German Rail and Transport Union (EVG) now expects the €49 ticket to be introduced in the spring.

“From our point of view, it seems realistic to introduce the Deutschlandticket on April 1st, because some implementation issues are still unresolved”, Burkert told the Redaktionsnetzwerk Deutschland on Monday. The Association of German Transport Companies, on the other hand, said on Wednesday that they believe the beginning of May will be a more realistic start date.

The federal and state transport ministers have set their sights on an April deadline, but this depends on whether funding and technical issues can be sorted out by then. In short, the only thing that seems clear regarding the start date is that it will be launched at some point in 2023. 

Why the delay?

Financing for the ticket continues to cause disagreements between the federal and state governments and, from the point of view of the transport companies, financing issues are also still open.

The federal government has agreed to stump up €1.5 billion for the new ticket, which the states will match out of their own budgets. That brings the total funding for the offer up to €3 billion. 

But according to Bremen’s transport minister Maike Schaefer, the actual cost of the ticket is likely to be closer to €4.7 billion – especially during the initial implementation phase – leaving a €1.7 billion hole in finances.

Transport companies are concerned that it will fall to them to take the financial hit if the government doesn’t provide enough funding. They say this will be impossible for them to shoulder. 

Burkert from EVG is calling on the federal government to provide more than the €1.5 billion originally earmarked for the ticket if necessary.

“Six months after the launch of the Deutschlandticket at the latest, the federal government must evaluate the costs incurred to date with the states and, if necessary, provide additional funding,” he said. 

READ ALSO: OPINION: Why Germany’s €49 travel ticket is far better than the previous €9 ticket

Meanwhile, Deutsche Bahn has warned that the network is not prepared to cope with extra demand. 

Berthold Huber, the member of the Deutsche Bahn Board of Management responsible for infrastructure, told the Welt am Sonntag newspaper that a big part of the problem is the network is “structurally outdated” and its “susceptibility to faults is increasing.” 

Accordingly, Huber said that there is currently “no room for additional trains in regional traffic around the major hub stations” and, while adding more seats on trains could be a short terms solution, “here, too, you run up against limits,” Huber said.

So, what now? 

Well, it seems that the federal states are happy to pay half of whatever the ticket actually costs – but so far, the federal government has been slow to make the same offer.

With the two crucial ministries – the Finance Ministry and the Transport Ministry – headed up by politicians from the liberal FDP, environment groups are accusing the party of blocking the ticket by proxy. 

According to Jürgen Resch, the director of German Environment Aid, Finance Minister Christian Lindner and Transport Minister Volker Wissing are deliberately withholding the necessary financial support for the states.

Wissing has also come under fire from the opposition CDU/CSU parties after failing to turn up to a transport committee meeting on Wednesday. 

The conservatives had narrowly failed in a motion to summon the minister to the meeting and demand a report on the progress of the €49 ticket.

“The members of the Bundestag have many unanswered questions and time is pressing,” said CDU transport politician Thomas Bareiß, adding that the ticket had falling victim to a “false start”. 

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