Lufthansa doubles 2022 profit forecast on surge in bookings

DEUTSCHE Lufthansa said full-year earnings will be twice as high as expected after higher ticket prices and a rebound in demand sparked an accelerated recovery from the coronavirus crisis.

Germany’s flagship carrier now expects 2022 adjusted earnings before interest and taxes of more than 1 billion euro (S$1.4 billion), according to a statement on Monday (Oct 17). That compares with previous guidance of above 500 million euros.

Lufthansa shares closed 1.6 per cent higher in Frankfurt after earlier jumping 4.6 per cent following the announcement.

Europe’s biggest airline follows British Airways parent IAG in reporting a surge in earnings after a bumper summer. IAG rose 8 per cent Thursday and Lufthansa gained almost 5 per cent after the London-based firm said third-quarter profit was about 50 per cent higher than predicted by analysts, with no sign of waning demand.

Lufthansa spent much of the peak holiday season battling disruption at its hubs, yet cancellations due to strikes and staff shortages pushed up ticket prices, lifting margins. Third-quarter revenue doubled to 10.1 billion euros, while adjusted Ebit jumped to 1.1 billion euros from 251 million euros the previous year.

The group, which also includes the Swiss, Austrian and Belgian flag carriers, said it’s seeing strong demand for travel over coming months, complementing an anticipated record result from the cargo division.

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Lufthansa was rescued by the German government after the Covid-19 pandemic grounded flights in 2020 but repaid its 9 billion-euro bailout ahead of schedule. That enabled the state to offload its stake at a profit last month. BLOOMBERG