Back To Normal? Lufthansa Sees A Way Out Of The Pandemic

Speaking at an event in Frankfurt, Lufthansa CEO Carsten Spohr said the airline’s summer has been so positive the airline can start to look to the future. Spohr confirmed that although passenger numbers are returning, the aviation industry would clearly be the last to recover from the global pandemic. And winter is looking tough. So does this mean things are finally returning to normal?

Back To Normal? Lufthansa Sees A Way Out Of The Pandemic
The pandemic has had a huge impact on Lufthansa, but is it finally over? Photo: Fraport AG

A good summer

Finally, things appear to be looking up for airlines. The summer season proved to be the first few months of solid growth in the industry since the pandemic began.  However, full recovery is still a long way away, and Lufthansa CEO Carsten Spohr isn’t convinced things are over just yet.

While speaking to journalists in Frankfurt, Spohr noted that most predictions regarding the pandemic have been wrong. All except one. The prediction that the entire aviation industry would be the first affected and last to recover seems to be coming true.

However, despite this rather gloomy prediction, Lufthansa’s numbers are looking better. Thanks to several cost-cutting exercises, the airline’s breakeven point is lower than before, meaning the airline can generate profit at around half of pre-pandemic numbers. This is something it achieved earlier this summer as it starting making a profit again.

Back To Normal? Lufthansa Sees A Way Out Of The Pandemic
Lufthansa CEO Carsten Spohr has said that the airline’s summer shows strong signs of recovery. Photo: Fraport AG

If everything continues on track, the airline is looking at 40% of pre-pandemic numbers for the 2021 full year. The airline also had a solid summer season for cargo operations, with Sphor confirming that the airline expects profits of around €1b ($1.1b) this year for cargo-only. To put that in perspective, the airline posted a €640m ($755m) cargo profit for the first half of the year. Things are starting to look up.

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Preparing for a tough winter

Although the airline CEO had a lot to say about a positive future, Spohr isn’t getting too complacent. His praise for the airline’s good summer numbers matched his concern for the coming winter months. Spohr said, “We are preparing for another long, cold winter for us as an airline, prompted, of course, by the fourth wave.” He went on to say that further recovery would “of course depend on when the U.S. and China open up.

Lufthansa has said one-way flights to the US are enough for now, especially when combined with cargo capacity across the Atlantic. Oktoberfest will also provide the airline with a boost.  However, with the EU officially taking the US off the safe travel list, winter does look very long and cold indeed.

Back To Normal? Lufthansa Sees A Way Out Of The Pandemic
Lufthansa’s summer operations have been boosted by strong cargo demand. Photo: Fraport AG

The road to recovery

Preparing for a difficult winter is not a surprise. Summer tends to be a better season for northern hemisphere airlines as the summer holidays increase demand. However, Lufthansa does plan on operating flights 90% of its pre-pandemic network over the winter months. With flights widely available but demand still low, passenger confidence is more of an issue than travel restrictions.

Despite an uncertain few months to the end of the year, Lufthansa is still looking ahead. The German government announced last week it would be selling down its stake in the airline. The government paid €300m ($354.8m) as a part of an economic rescue package last year. It’s thought the block of shares is now worth more than €1b ($1.1b). Spohr plans to repay the state aid by this time next year. Ambitious? Yes. But is it possible?

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