Lufthansa Airlines has reported a net loss of -€265m for the first half of 2024, down from a net profit of €414m for the same time last year. Total revenue for the first half of the year was €17,399m, an increase of 6% from the first quarter 2023.
The net loss in the first half 2024 was mainly because of increasing seating capacities in planes leading to lower airfares, as well as the company seeing ongoing delays in plane deliveries in the first half of the year. This was compounded by soaring strike costs and structural issues.
Operating income for the first half of the year was €18,807m, up 5% on the same period last year, whereas adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for H1 2024 was €978m, a 49% dive from the first half of 2023.
For the second quarter 2024, operating income came up to €10,632m, which was also an increase of 5% from the second quarter last year. Adjusted EBITDA on the other hand was €1,257m, which was a drop of 23% from Q2 2023.
As a result of the loss, the Deutsche Lufthansa group revealed that it would be focusing on implementing a turnaround programme to speed up the modernisation of Lufthansa Airlines. This programme will mainly focus on increasing revenue, by raising investments in service and improving products. Certain aircraft sub-fleets such as the Airbus A340-600 and the Boeing 747-400 by 2028.
Lufthansa warns cost pressures may continue
The airlines also revealed that these challenges were likely to continue into the third quarter of the year, with yields likely to be lower than 2023 levels, down to the low single-digit percentages in the third quarter.
Portugal, Spain, Greece and Italy were the most visited short-haul summer destinations, whereas Southern Africa, the US and Japan were some of the most popular long-haul destinations.
Carsten Spohr, chairman of the executive board and chief executive officer (CEO) of Deutsche Lufthansa AG, said, in the second quarter earnings press release: "Global demand for air travel remains strong. As a result, we exceeded the €10bn turnover mark for the first time in the second quarter.
"However, due to the increase in available seat capacity, the normalisation of air fares and average yields continued in all markets worldwide in the first half of the year. In view of the simultaneous rise in costs, profit expectations had to be adjusted across the industry - and also for us.
"Strategically, we have made decisive progress with four relevant projects: the introduction of our new intercontinental product 'Allegris', the launch of Lufthansa City Airlines and the approval of our stake in ITA Airways by the EU Commission. These optimisations of our business model will help us to strengthen our position as number one in Europe."
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