Labour strikes slash Lufthansa Group’s Q1 2024 earnings by $374.6 million

Lufthansa Group, a prominent player in the aviation industry, faced a turbulent start to 2024, with strikes causing a significant financial strain. The airline reported a negative financial impact of approximately €350 million ($374.6 million) due to labour actions, resulting in adjusted negative earnings before interest and taxes (EBIT) and a net loss of -€849 million ($909 million) and €734 million ($785.8 million), respectively. Despite these challenges, the group remains optimistic about the future, citing strong demand and the signing of long-term wage agreements as positive developments.

Carsten Spohr, Chairman of the executive board and CEO of Lufthansa Group, expressed confidence in the group’s ability to recover in a statement, saying, “We are now at a turning point, having reached long-term wage agreements with several unions. This means planning certainty and clarity for the coming years.” He also highlighted the strong demand, significantly higher than the previous year, especially for the upcoming summer season.

The group is actively expanding its capacity, with high load factors on its flights, indicating a promising summer ahead. Business travel is also showing signs of recovery, prompting the group to focus on enhancing its premium offerings. Additionally, Lufthansa recently unveiled its upgraded long-haul fleet cabins, known as ‘Allegris,’ showcasing its commitment to providing exceptional service to its passengers.

Despite the challenging quarter, there were some positive indicators. The group’s total revenue increased by 5% year-on-year to €7.3 billion ($7.8 billion), with a 12% increase in the number of passengers compared to the previous year. Capacity, measured in available seat kilometres (ASK), also grew by 12%, demonstrating the resilience of the airline.

Looking ahead, Lufthansa Group expects a positive outlook for the remainder of the year, anticipating strong demand in both the private and business travel segments. The group aims to recover to 92% of its 2019 capacity levels, with plans to take delivery of 30 aircraft. However, the aviation industry continues to face challenges, including aircraft delivery delays, which could impact the group’s capacity assumptions.

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