Lufthansa joins peers in predicting travel recovery this year

BLOOMBERG

Deutsche Lufthansa AG joined major European airline companies in predicting an earnings boost this year as travel demand continues to swing back from the coronavirus pandemic.
The region’s biggest airline group said it expects a “significant improvement” on the €1.5 billion ($1.6 billion) adjusted earnings before interest and taxes result it reported for 2022. Summer vacations to Mediterranean countries and travel on North Atlantic routes will be particularly strong, the carrier said.
“Lufthansa is back,” Chief Executive Officer Carsten Spohr said in a statement.
“In just one year, we have achieved an unprecedented financial turnaround.”
Lufthansa is the last major European airlines to report earnings for last year, joining Air France-KLM and British Airways parent IAG SA in predicting a recovery approaching pre-pandemic levels in 2023. While European household and company budgets continue to get squeezed by high inflation, demand for business travel and summer getaways in particular has remained robust.
The global aviation sector as a whole continues to enjoy a comeback since most countries lifted their coronavirus restrictions. Airbus SE said that it’s increasing the rate of production on its largest aircraft to meet rebounding long-haul demand, and budget carriers like Ryanair Holdings have said that summer bookings point to a strong summer season.
Capacity will rise to between 85% and 90% compared with pre-pandemic levels. At the same time, Lufthansa cautioned that persistent bottlenecks in the European aviation system will limit capacity to about 75% in the first quarter.