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Deutsche Lufthansa AG predicted demand for travel will remain strong in coming months as the desire to travel in the wake of the pandemic outweighs concerns about higher cost of living and the uncertain economic future.
The airline group said demand for flights in the fourth quarter looks strong, adding it also expects a robust performance for its maintenance and cargo divisions in the period. Bookings for the final quarter are running ahead of the levels seen for the same quarter in 2019, just before the pandemic tipped global aviation into an unprecedented downturn.
“The Lufthansa Group has economically left the pandemic behind and is looking optimistically into the future,†Chief Executive Officer Carsten Spohr said in a statement.
Lufthansa spent much of the peak holiday season battling disruption at its hubs as bookings surged, yet cancellations due to strikes and staff shortages pushed up ticket prices, lifting margins. Yields, a measure of airline profitability, rises 23% in third quarter compared to same period 2019, hitting a record.
The airline’s strong bookings come despite mounting signs of a slowdown in company’s home European markets. A blend of high inflation and rising interest rates, as well as concerns over Russia’s war in Ukraine dented consumer, business confidence.
The company already raised guidance earlier this month. Germany’s flagship carrier now expects adjusted earnings before interest and taxes this year of more than €1 billion. That compares with previous guidance of above €500 million.
—Bloomberg