It may seem strange, but despite the ban on most travelers from Germany heading to the United States, North America is the Lufthansa Group’s most profitable market. Group CEO Carsten Spohr revealed the surprising information during this morning’s Q2 results presentation.
Travel across the North Atlantic corridor has been severely restricted for much of the past year as countries on both sides of the ocean seek to protect their citizens from COVID-19. Now, travel from the US to Europe is possible, but not from Europe to the United States.
Most profitable market
According to Lufthansa Group CEO Carsten Spohr, North America is the group’s most profitable market. You may be wondering why given that travel in one direction isn’t possible for most, compared to intra-EU travel, which is relatively unrestricted.
While discussing why this is, Spohr cited the enormous cargo yields being seen on the route. He revealed that many flights through the corridor are being operated for their freight capabilities, with paying passengers who can travel coming as an added benefit. Spohr said,
“The best [cargo] yields in the network are between Europe and the US… Even flights which are not full are very profitable and we are filling up the passenger cabin with the Americans and others who have passports to enter the US.”
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Will the US be open to Europeans?
Spohr is confident that the US will reopen to Europeans. He says that it is just a matter of time before the decision is made, and the Lufthansa Group expects such a change to be brought in from late September onwards. Commenting on this point, Spohr added,
“I think there’s not a single businessman or businesswoman who does business with the US who doesn’t want to go there in the fall… While we are waiting for the North Atlantic to reopen for Europeans, the US point of sale benefits from very high demand [because] the transatlantic is leading the recovery of our long-haul business.”
The airline revealed that passenger bookings made in the United States shot up by 92% from May to June. Last night, Reuters reported that the country is working on a plan to allow fully vaccinated visitors to enter the US instead of the current travel restrictions. Spohr mentioned this point several times, revealing that it gave him confidence that the change of rules could be sooner rather than later.
Many have questioned the logic of the US’ continued travel ban. Currently, a fully vaccinated German citizen cannot travel from Germany to the US. For reference, as of today, Germany has a seven-day incidence of 19.4 per 100,000 residence. 62.1% of individuals have had one vaccine dose, with 53.6% of the population now fully vaccinated. The same cannot be said for many nations that are not prohibited from flying to the US.
Were you surprised to find out that North America was Lufthansa’s best market for profit? Let us know what you think and why in the comments below!