Lufthansa cuts loss on cost cuts and resumption of bookings
- Adjusted operating loss for the second quarter of 952 million euros; forecast 971 million
- The second quarter saw a cash inflow of 340 million euros
- Maintains the 2021 capacity target at 40% of 2019 levels
FRANKFURT, Aug. 5 (Reuters) – Germany’s Lufthansa (LHAG.DE) said on Thursday that the recovery in air travel and progress in savings had helped the airline further reduce its losses in the second quarter and record cash inflows for the first time since the start of the year. coronavirus crisis.
The group, which also owns Eurowings, Swiss, Brussels and Austrian Airlines, announced that its adjusted operating loss fell to 952 million euros ($ 1.13 billion) from 1.7 billion euros a year earlier, slightly below the 971 million euros forecast in a survey provided by the company. .
Lufthansa said the easing of travel restrictions and pent-up demand led to a significant recovery in the quarter and, together with cost savings, including job cuts, helped stem the loss of cash and generate a cash inflow of 340 million euros.
“The fact that over 30,000 colleagues have left us in the process so far hurts us all, but is inevitable to save the over 100,000 remaining jobs in the long term,” Managing Director Carsten Spohr said in a statement.
Lufthansa shares rose around 0.3% by mid-morning.
Bernstein analysts welcomed the progress of the restructuring, but noted uncertainty over the group’s fundraising plans.
“There is still no decision on the size and timing of a capital increase, previously scheduled before the September election – and still top of investor concerns,” they said in a note. Read more
Lufthansa said its airlines carried 7 million passengers in the quarter, 18% of 2019 levels, although numbers improved in the quarter to 40% at the end of June. Revenue rose 70% from a year ago to 3.2 billion euros, slightly below analysts’ forecasts.
Rivals including Air France-KLM (AIRF.PA) and British Airways owner IAG (ICAG.L) have also reported a return to positive cash flow.
While forecasting strong tourism demand and a gradual recovery in business travel in the second half of the year, the group maintained its full-year capacity target at 40% of pre-crisis levels and expected it to reach 50. % in the third quarter.
EasyJet (EZJ.L) and Ryanair (RYA.I), low-cost airlines without transatlantic connections affected by US restrictions on inbound travel, plan to reach two-thirds of capacity, and Air France-KLM the saw 60% to 70%.
Lufthansa, which in June presented plans to return to profitability with fewer planes and personnel than before the pandemic, said it had already achieved half of € 3.5 billion in cost cuts targeted by 2024. That was six months ahead of plan, helped by better-than-expected uptake of voluntary departure programs in Germany and Switzerland. Read more
The group said its freight business made a record profit, while its service business went black in the quarter.
($ 1 = 0.8450 euros)
Reporting by Ilona Wissenbach and Tomasz Janowski Editing by Maria Sheahan and Mark Potter
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