Lufthansa upbeat on travel demand as Q3 beats estimates

A Lufthansa Airbus A319 airplane lands at the Charles de Gaulle International Airport in Roissy, near Paris, July 28, 2017. REUTERS/Benoit Tessier/File PhotoDemand for both short-haul and long-haul remains strongon Thursday reported quarterly profits slightly above analysts’ consensus on the back of robust travel demand this summer and said bookings remained strong ahead of the busy Christmas holiday season.

Europe’s airlines have reported record quarterly profits as consumers have kept travelling despite a cost of living crisis, but the outlook has been clouded by rising oil prices due to conflict in the Middle East and risks of recession, hitting share prices.

Lufthansa reported third-quarter adjusted earnings before interest and tax (EBIT) of 1.47 billion euros ($1.56 billion), up 31% year-on-year and slightly above average expectations for 1.43 billion in an analyst consensus published on the company’s website.

“Even though the geopolitical situation remains challenging, our booking outlook gives us reason to be positive – not only for a very good group result this year, but also beyond,” Chief Executive Carsten Spohr said.

Lufthansa said yields reached a record in the third quarter, 25% above the same quarter in 2019, and bookings for the fourth quarter were up by double-digit percentages year-on-year. Demand for both short-haul and long-haul flights remained high, especially among leisure travellers, it said, and the trend towards more bookings in pricey premium classes continued.

Thanks to that, the group expects to post a positive operating result for the fourth quarter, helping it achieve its aim of an adjusted group EBIT of more than 2.6 billion euros for the full year 2023.

Next year, Lufthansa expects capacity to increase further to around 95% of pre-pandemic levels, which should help it post an adjusted EBIT margin of at least 8%.South Korea’s Asiana Airlines said on Thursday its board had approved the sale of the company’s cargo business – an important step towards allaying EU competition concerns about a proposed takeover by Korean Air Lines .

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