Lufthansa Made Its Business Look Plane And Simple

Lufthansa Made Its Business Look Plane And Simple

12 months ago1 min

Mentioned in story

Lufthansa made the airline business look like child’s play with high-flying results out on Friday.

What does this mean?

Airlines are back, baby. The performance of Air France-KLM and IAG suggested as much, and now Lufthansa – the final major European airline to report – has banished any lingering doubts. See, the German carrier said the number of passengers it flew last year more than doubled from 2021, and its operating profit swung into the black too. There was one caveat, though: those passenger and operating profit figures still fell short of pre-pandemic levels, by 28% and 34% respectively. But Lufthansa’s predicting another big upswing – and with demand for business travel and sunny summer getaways already strong, the firm could well be right. Investors were convinced, at any rate, bumping shares up by 5%.

Passenger airlines results
Source: Lufthansa

Why should I care?

The bigger picture: Plane sailing.

Even Lufthansa’s long-haul business, which looked like it was toast not so long ago, is making a comeback. In fact, demand’s so strong that the firm’s gone and ordered 22 new widebody planes from Airbus and Boeing, in deals worth a total of $7.5 billion. And in good news for the struggling manufacturers, it seems that’s part of a trend: Airbus announced plans to ramp up production of its biggest planes just last month, in a bid to meet rebounding long-haul demand.

Lufthansa stock
Source: Google Finance

Zooming out: Final call.

Promising the stars is all well and good, but reaching them requires a rocketship – a tall order when it’s hard to board even a meager plane. See, understaffed and under-resourced airports caused all kinds of trouble last summer, and no one wants a repeat of those scenes this time around. That’s got Lufthansa scrapping some flights, and battle-scarred airports limiting capacity too.

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