Lufthansa Group reports slightly lower earnings in 2018

posted on 14th March 2019 by Justin Burns

Lufthansa Group has reported adjusted earnings before interest and taxes (EBIT) in 2018 of 2.83 billion – a four per cent fall on the prior year figure of 2.96 billion while total revenues came in at 35.8 billion – six per cent more than 2017 (35.5 billion).

This annual result came despite fuel costs soaring by 850 million and 518 million of expenses incurred through delays and cancellations – up a substantial 70 per cent from the 304 million of the prior year.

In addition, the Eurowings result was burdened by some 170 million one-off costs related to the integration of parts of the former Air Berlin fleet.

Lufthansa chief executive officer, Carsten Spohr said: “We generated the second-best result in the history of our company. This is a great teamwork achievement by all the 135,000 people who make up our group workforce.”

The Lufthansa Group’s total aircraft fleet (Lufthansa, SWISS, Austrian Airlines, Eurowings and Brussels Airlines) grew by 35 aircraft and numbered 763 aircraft at the end of the year.

“For our customers, we want to be the best airline group in Europe,” said Spohr. “At the same time, we are fully aware of maintaining sustainable business activities. This is why we continue to invest in advanced, low-noise and fuel-efficient aircraft.

“The 40 state-of-the-art long-haul planes that we ordered yesterday will replace the significantly less efficient four-engined aircraft in our fleet. As a result, we will have totally modernized our entire long-haul fleet by the mid-2020s.”

The fuel savings from this alone will amount to 500,000 tonnes a year, equaling 1.5 million tonnes of less carbon dioxide emissions.

The logistics segment with Lufthansa Cargo increased its record adjusted EBIT of 2017 by a further two per cent to 268 million (2017: 263 million).

Adjusted EBIT for Lufthansa Technik was also two per cent up at 425 million (2017: 415 million). The catering business of the LSG Group achieved an adjusted EBIT for 2018 of 115 million (2017: 66 million), a year-on-year increase of 74 per cent.

In 2019, Lufthansa Group said it will be focusing on achieving sustainable quality growth and is further reducing the capacity growth for its airlines for the upcoming summer to 1.9 per cent. Despite this, the group expects to report mid-single-digit percentage annual revenue growth.

Meanwhile, Lufthansa Group has reported it flew around nine million passengers in February 2019, 1.9 per cent more than February 2018 with strong growth in Vienna and Zurich high while Eurowings posted double-digit growth in product range and sales volume.

The available seat kilometres were up seven per cent over the previous year, at the same time, sales increased by 7.2 per cent. In addition, as compared to February 2018, the seat load factor increased by 0.2 percentage points to 76.5 per cent.