With shares rising more than 6.5%, Lufthansa (LHAG.DE) posted quarterly earnings on Thursday that were marginally higher than analysts’ projections thanks to solid summer travel demand. The airline also stated that reservations were still going well in advance of the Christmas holiday season.
The Middle East war has caused increased oil costs, which has clouded the outlook and hurt share prices. Despite this, customers have continued to fly, and Europe’s airlines have recorded quarterly earnings.
The company’s website states that Lufthansa’s third-quarter adjusted profits before interest and tax (EBIT) were 1.47 billion euros ($1.56 billion), up 31% from the prior year and slightly higher than the analysts’ average prediction of 1.43 billion.
“Even though the geopolitical situation remains challenging, our booking outlook gives us reason to be positive—not only for a very good group result this year but also beyond,” Carsten Spohr, our chief executive officer, stated.
Following the results report, Eikon data indicates that Lufthansa shares were poised for their most significant day increase since June 2022. On Wednesday, shares had dropped to a one-year low.
Bookings for the fourth quarter increased by double-digit percentages year over year, according to Lufthansa.
It stated that there was still a strong demand for short- and long-haul flights, mainly from leisure travelers, and a continuous trend toward more reservations in the pricy premium classes.
Despite rising inflation, costs were 0.9% lower than the previous quarter, and net profits came in at 1.2 billion euros.
The group anticipates a favorable operating result for the fourth quarter due to declining expenses and increased demand for flights, which will aid in achieving its goal of an adjusted group EBIT of more than 2.6 billion euros for 2023.
Lufthansa anticipates that passenger seating capacity will rise the following year, reaching around 95% of pre-pandemic levels. According to them, capacity will increase to 91% of pre-pandemic levels in the fourth quarter.
“We continue to see a more cautious pace of capacity restoration at Lufthansa vs. other European peers … likely a sensible move given the increasingly permanent-looking impairment in the key corporate segment,” Alex Irving, a Bernstein analyst, wrote in a note.
Comment Template