Lufthansa counting on vaccine rollout after US$8.1b loss

Frankfurt

DEUTSCHE Lufthansa AG posted a record 6.7 billion-euro (S$10.7 billion) annual loss and said it's dependent on a successful vaccine rollout to get people flying again as the coronavirus crisis continues to roil air travel.

Europe's biggest airline group said on Thursday it will struggle to make money on flights before the end of this year as it dials back capacity plans. Chief executive officer Carsten Spohr said there could still be a revival this summer, but only if the pace of jabs allows international curbs to be eased.

"We expect demand to pick up again as soon as restrictive travel limits are reduced by a further roll-out of tests and vaccines," Mr Spohr said.

"Internationally recognised, digital vaccination and test certificates must take the place of travel bans and quarantine."

Network carriers like Lufthansa have seen the long-haul markets on which they depend almost wiped out by the pandemic. Mr Spohr warned that his airline may be able to operate only 90 per cent of its pre-pandemic capacity even by mid-decade, after previously suggesting the market would recover fully by 2024.

Lufthansa's reassessment of the hoped-for rebound comes with travel still largely locked down and the European Union struggling to accelerate Covid-19 vaccine rollouts after a sluggish start.

The airline now expects to deploy between 40 per cent and 50 per cent of its 2019 capacity levels this year, compared with a previous target of 40 per cent to 60 per cent. That's bad news for profitability, given that it needs to operate with around half of available capacity to stem cash outflows. BLOOMBERG