Lufthansa gives upbeat outlook as travel demand remains strong

Deutsche Lufthansa forecast profit will keep rising in coming months amid a boom in demand, even as staffing shortages prompt airports to limit capacity.

Europe’s biggest airline group said on Thursday it expects a significant increase in earnings in the third quarter compared with the second. That’s after high ticket prices and bumper profits at the company’s cargo division more than offset increases in fuel costs in the second quarter.

The shares rose as much as 5.3 per cent in early German trading.

Lufthansa also provided a clearer outlook for full-year profit, predicting adjusted earnings before interest and taxes of more than €500 million, which compares with the €585 million estimate of analysts. The airline previously said only that it expected an improvement in 2022 compared with last year.

Extend EV grant to second-hand purchases, says PwC

---

Wave of innovation aims to make desalination sustainable

---

Smart heater gives greater control over comfort and cost

---

Helping stressed-out GPs manage staffing issues in the workplace

---

While travellers across Europe are grappling with disrupted flights amid the staffing crunch and a wave of strikes, the region’s airlines are making money again as travel rebounds from the Covid crisis. Capacity caps introduced to avoid late cancellations may have crimped passenger tallies, but they’ve also lifted fares in a business where demand was already close to matching supply.

Having reduced its workforce during the pandemic, Lufthansa said it will hire some 10,000 new employees over the next 18 months, a move aimed at smoothing disruptions to travel.

Lufthansa has cancelled about 7,000 flights for the busy summer season due to a shortage of staff and strikes from its ground crew union. The airline’s pilots’ union has voted in favour of walkouts, but hasn’t yet decided whether to hold them as pay talks continue.

“Together, we have steered our company through the pandemic and thus through the most severe financial crisis in our history,” chief executive officer Carsten Spohr said in a statement. “Now we must continue to stabilise our flight operations.”

Lufthansa posted adjusted earnings before interest and taxes of €393 million for the second quarter, after saying last month that the figure would total between €350 million and €400 million.

Rivals Air France-KLM and British Airways parent IAG last week posted positive earnings for the first time since global travel was roiled by the pandemic. The former plans to hike capacity close to pre-coronavirus levels in the final three months of 2022, while IAG predicts higher earnings this quarter and a positive full-year result.

Lufthansa didn’t give an update on asset sales, which its management has said are needed to cut debt. The airline plans to sell its international catering business and its AirPlus corporate travel payments unit.

“We are concerned that these become challenging to execute at acceptable valuations in a down equity market,” Bernstein analyst Alex Irving said. — Bloomberg