Lufthansa Group reveals improved 2023 profits amid ongoing labor woes   - Istanbul Airport Meet and Assist

Germany’s Lufthansa Group has announced its financial performance figures for 2023. The data reveals that the group generated the third-best financial result in its history due to the continued high demand for air travel. However, the results are overshadowed by caution for 2024 as Lufthansa has continued to struggle against ongoing industrial action by ground workers and other staff.

Operating profits for 2023 reached €2.7 billion ($2.97bn), an increase of 76% from €1.5 billion ($1.63bn) in 2022. Revenues of €35.4 billion ($38.58bn) were up almost 15% but were lower than the €36.3 billion forecast by analysts.

The group said that overall demand for tickets rose once again in 2023. A total of 123 million passengers traveled with the airlines of the Lufthansa Group (Lufthansa, Eurowings, Swiss, Austrian, Brussels Airlines) representing an increase of 20% increase over the previous year when the airlines carried 102 million passengers.

Additionally, the Lufthansa Group airlines increased the number of flights offered by 14% to 946,000 with the total number of seats offered for sale being gradually expanded over the year. On average, the airlines offered 84% of 2019 capacity in 2023, while the seat load factor improved by 3.1% overall to around 83%, returning this figure to pre-pandemic levels for the first time. 98% of all flights were able to take place as planned.

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“The strong result for the financial year 2023 is another important step in positioning the Lufthansa Group for the future,” said Remco Steenbergen, Chief Financial Officer of Deutsche Lufthansa AG. “Our solid balance sheet and strong free cash flow enable us to make the necessary investments in our fleet and our product. I am convinced that these investments will pay off – for our customers, but also for our shareholders.”

“The Lufthansa Group has set itself the goal of continuing to pursue the path of profitable growth to increase the operating margin in the long term and continue to create value in the future. I am particularly pleased that we can once again allow our shareholders to participate in our success by resuming dividend payments,” he added.

However, despite the gloss, the immediate financial outlook for 2024 is uncertain for Lufthansa. The carrier has been beleaguered with a series of grueling strikes by ground staff over the past year that has resulted in thousands of canceled flights and even more passengers’ travel plans disrupted. While Lufthansa has agreed in principle to a new, higher pay deal to end the strikes, analysts and investors believe that this will threaten its overall 2024 operating margins and ultimately its profit figures.

Nonetheless, and despite the gloomy forecast for the 2024 financial year, Lufthansa Group says its customers should see benefits thanks to the financially successful 2023. In 2024, the Lufthansa Group will invest a record sum of around €4.5 billion ($4.95bn) in new aircraft, new seats, lounges, and improved culinary and digital offerings to significantly increase customer satisfaction.

With the new “Allegris” cabins at Lufthansa, and “SWISS Senses” at SWISS, the Lufthansa Group airlines are aiming to set new standards and win back loyalty from passengers who had previously used the carrier but have been persuaded, or even forced, to use its competitors over the last twelve months due to the strikes.

2024 – a record year for aircraft deliveries

The Lufthansa Group is currently undergoing the largest fleet modernization in its history. In 2024, the company will take delivery of more than 30 new aircraft, including around 20 long-haul airplanes. This includes at least ten Boeing 787-9 Dreamliners, eight Airbus A350-900s, and an additional Boeing 777 freighter will all be delivered to the company in 2024. 

“Never before in our history have we been expecting the delivery of so many new long-haul aircraft for Lufthansa in just one year,” Lufthansa said in a statement.

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Markus Mainka / Shutterstock

In total, the Lufthansa Group currently has over 250 latest-generation aircraft on its order books.

In the medium term, the modernization program will lead to the decommissioning of older sub-fleets, and a sustainable reduction in CO2 emissions. The group also hopes it will lead to a significant increase in customer comfort and satisfaction levels, improving on 2023 which was a troubled year for the German airline group.

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