Lufthansa Warns of Low Yields as Capacity Expands - Aviation International News

Lufthansa Group, for now, is sticking to plans to keep 300 aircraft grounded in 2021 and 200 in 2022, but these numbers may be on “the low side” because the company’s outlook on the recovery of air travel demand is somewhat less positive than it was a couple of months ago when it drafted the fleet restructuring plan, the group’s CEO Carsten Spohr conceded on Thursday. Speaking during a second-half results call with analysts, he said customer demand is only improving at a low rate.  

Spohr noted the industry is experiencing a pause in global air traffic. “We do not expect demand to return to pre-crisis levels before 2024,” he said. “Especially for long-haul routes there will be no quick recovery.”  Lufthansa reported a €1.7 billion ($2 billion) adjusted operating loss for the three months to the end of June, its largest-ever quarterly operating loss.

Lufthansa Group ‘s airlines carried just 1.7 million passengers in the second quarter, which was 96 percent fewer than in the previous year. Capacity in terms of available seat kilometer (ASK) has been reduced by 95 percent.

Most of the revenue was generated by the German flagcarrier’s MRO division, Lufthansa Technik, and also by Lufthansa Cargo, which Spohr said recorded a “stellar” performance. The air freight division generated a record operating margin of 39 percent and yields doubled year-on-year because of the capacity squeeze from the grounding of passenger aircraft. Like most airlines, Lufthansa used some passenger aircraft to carry only cargo. “Some of these “passenger services” broke even without even a passenger on board,” Spohr said. “I have never seen this before.”

After operating a skeleton schedule in April and May, the group gradually expanded its flying program and its passenger airlines jointly flew nine percent of the previous year’s capacity at the end of June.
Source…