(Reuters): Lufthansa achieved an “unprecedented” turnaround on Friday, swinging to a 1.51 billion euro profit in 2022 and expecting a substantial increase in profits this year, pushing its shares up to a three-year high as air travel recovers.
Passenger numbers have more than doubled and net income has nearly doubled since 2021, though both statistics stay below pre-pandemic levels.
“Lufthansa has returned,” said CEO Carsten Spohr in a statement. “We have accomplished an extraordinary financial turnaround in just one year… “Air travel demand is expected to stay strong in 2023,” he went on to say.
Stocks rose more than 5% on Friday to a three-year peak, having risen more than 30% in value since December of last year.
The company’s operating earnings for the entire year were 1.51 billion euros ($1.60 billion), up from a loss of 1.6 billion euros the previous year.
The fourth-quarter earnings increased to 575 million euros from a deficit of 42 million euros, as expected.
The financial account improved as well, with net debt falling from 9 billion euros to 6.9 billion euros.
However, running profit was still 34% lower than it had been before the epidemic, and passenger numbers had only regained 72%. Lufthansa, like others in the industry, is dealing with high cost inflation as well as a rise in gasoline costs.
Yields, on the other hand, are anticipated to remain about 20% higher than in 2019 as increased expenses are passed on to passengers, according to a Lufthansa representative at a media conference.
This year, the business anticipates “further substantial improvement” in net profit.
After cancelling many flights last year, the business is attempting to avoid travel pandemonium this summer by cancelling some planned flights due to a lack of terminal and technical employees.
Spohr stated at a press briefing that the chance of additional delays would be determined by terminals rather than carriers, but that capacity could be restricted due to high demand.
The Verdi Union in Germany, which recently scheduled airport and flight protests, said Lufthansa’s return to profitability meant it needed to make an improved deal with workers.
“The Executive Board must now regain employee confidence,” said Marvin Reschinsky, Verdi group manager for Lufthansa, as the union presses for a 3,000-euro bonus for all workers.
Spohr stated that Lufthansa had already secured a permanent pay increase above inflation for workers.
($1 equals 0.9418 euros).