Higher yields see Lufthansa Cargo report 10% more earnings

Lufthansa Cargo reported a 10 percent increase in earnings at €331 million ($334 million) for the third quarter on yields well above pre-Covid levels.

Although airfreight capacities on passenger aircraft are increasing again due to the continuation of air traffic recovery, especially on the North Atlantic, average yields remain well above pre-crisis levels, especially on routes to Asia driven by significantly reduced capacity compared to 2019 and resilient demand, says an official release.

Revenue increased 31 percent to €1.1 billion ($1.1 billion) for the third quarter and was up 40 percent to €3.6 billion ($3.6 billion) for the first nine months.

"In the first nine months of the year, Lufthansa Cargo has thus already achieved an operating profit of €1.3 billion (previous year: €943 million), and is on course for a full-year result even above last year's record €1.5 billion."

In the third quarter, Lufthansa Technik benefited from the high demand for air travel and the associated demand from airlines worldwide for maintenance and repair services, the release said. "The volume of business was already back at around 90 percent of the pre-crisis level. Lufthansa Technik generated an adjusted EBIT of €177 million (previous year: €149 million), the best quarter ever for the company. The forecast for the annual result was raised again. Lufthansa Technik is thus also heading for a new record for the full year."

Q3 revenue was up 38 percent to €1.4 billion and nine-months revenue increased 46 percent to €4 billion.

Group revenue doubles
Group revenue almost doubled compared to last year ( up 93 percent) to €10.1 billion ($10.2 billion).

"The company generated an adjusted EBIT of €1.1 billion including an impact from strikes of around €70 million. The operating margin amounted to 11.2 percent (prior year: 4.8 percent). Net income increased significantly in the third quarter to €809 million (previous year: -72 million euros)."

Carsten Spohr, CEO, Deutsche Lufthansa AG says: "The Lufthansa Group achieved a very strong result in the third quarter with an operating profit of over one billion euros, thus demonstrating its regained profitability. All business segments, passenger airlines as well as logistics and MRO, contributed to this success. This once again underlines the strength of our portfolio. The Lufthansa Group has economically left the pandemic behind and is looking optimistically into the future. After all, the desire to travel and thus the demand for air travel continues unabated. Now we are focusing on the future and launching the biggest product renewal in our history. We are investing in 200 new aircraft and offering perspectives for our employees around the world. It remains our ambition to further strengthen our position among the top 5 airline groups in the world."

Hikes earnings forecast
The Lufthansa Group expects demand for air travel to remain strong in the coming months with average yields remaining high, the release said. The Group now expects an adjusted EBIT of over €1 billion in 2022 and an adjusted free cash flow of over €2 billion euros.