Lufthansa Returns To Profit As Bookings Return In Droves

Today, the Lufthansa Group revealed that it had returned to profit for the third quarter of 2021, with a profit of €17 million for the quarter. While it doesn’t sound so impressive, this compares to a loss of €1.3 billion for the same period last year. The airline group has seen bookings return to 80% of their pre-pandemic levels, a clear sign that passenger demand, and therefore the industry, is recovering.

Lufthansa, Passenger Demand, Profit
Lufthansa returned to profit for the first time since the start of the pandemic. Photo: Oliver Roesler via Lufthansa

At the height of the pandemic, Lufthansa wasn’t in a good place. The airline was reportedly considering bankruptcy proceedings in April 2020, when its main revenue flow completely dried up. A €9 billion government cash injection helped the airline weather the storm. It now seems as though the storm will be shorter than expected, with Lufthansa previously holding a very pessimistic outlook on recovery.

A surge in bookings

Lufthansa is seeing a massive surge in bookings, which is the bread and butter of the airline’s finances. While Lufthansa Cargo has been playing an essential role through the pandemic, a considerable part of Lufthansa’s income comes from passengers booking flights. Take this away, as was seen in mid-2020, and the airline ends up in a very sticky situation.

Thankfully, bookings are returning to normal. Vaccinations have lowered the risk of the virus, allowing travel more freely, including to the US from next week. In total, passenger bookings now sit at 80% of their 2019 level.

Lufthansa, Boeing 747, Return
The airline has seen an enormous surge in demand for bookings to the United States. Photo: Tom Boon – Simple Flying

As mentioned, the United States is reopening to vaccinated travelers from Europe next week. Even while the route was closed, Lufthansa revealed that North America was its most profitable market. You can imagine how happy the airline was following Biden’s reopening announcement. And it seems passengers are equally delighted. Booking to the US was up 81% in week 41 compared to the same week in 2019.

What about business traffic?

Lufthansa was always clear that business and corporate travel would take longer to recover than leisure and VFR (visiting friends and relatives) travel, which has been reflected in the airline’s results.

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Looking at year-to-date figures, Eurowings is the only Lufthansa Group airline that has posted a profit so far. This highlights the faster rebound of leisure travelers, as Eurowings has a more leisure focus than its flag carrier sisters that continue to be affected by lower corporate bookings.

With that being said, some progress is starting to be made in the corporate sphere. According to the airline, Germany’s corporate ticket sales increased by almost 120% from the second to third quarters.

Lufthansa, Passenger Demand, Profit
Even corporate bookings are now beginning to recover. Photo: Lufthansa

Commenting on the results, Lufthansa Group leader Carsten Spohr remarked,

“With rising demand for business travel and a record result of Lufthansa Cargo we have mastered another milestone on our way out of the crisis: We are back to black. We confirm our leading position among the world’s largest airline groups. Now it is a question of continuing on the path of successful change.”

What do you make of Lufthansa’s return to black? Let us know what you think and why in the comments!