Lufthansa forecasts profits boost from wealthy passengers

Germany’s Lufthansa has predicted that demand from wealthy passengers will bring “substantially higher” profits despite widespread travel chaos and disputes with unions.

“We see a nice ramp-up coming for the third and the fourth quarter,” said chief executive Carsten Spohr, adding that the airline could carry 80 per cent of its pre-pandemic passenger numbers next year, even as economic data increasingly point to a global recession.

“People who are travelling business class or even first class on an airline like Lufthansa . . . they tend to be less sensitive to economic up and downturns,” said Spohr. However, he confirmed that business travel bookings were still at only 50 per cent of their pre-Covid levels.

The airline’s wealthier customers “are willing to spend money on vacations, on hotels, on rental cars, on expensive restaurants and [are] also willing to spend more money for personal space and travelling”, he added, citing data from Lufthansa subsidiary Swiss.

Before the pandemic, corporate bookings accounted for 45 per cent of the group’s revenue. But Lufthansa has reduced capacity for business travel since companies moved to holding more meetings online.

Net profits for the three months to the end of June were €259mn, compared with a €756mn loss in the same period last year, putting the airline on track to post an annual profit for the first time since the pandemic began.

Lufthansa’s cargo division benefited from high demand for freight transport, posting record earnings before tax and interest of €482mn in the quarter.

The group’s shares rose by more than 6 per cent in morning trading in Frankfurt.

Like other airlines, Lufthansa has been forced to cancel thousands of flights because of staff shortages at major hubs such as Frankfurt and Munich. The group, which includes Austrian Airlines, Eurowings and Brussels Airlines, said it had hired about 5,000 employees in the past few months.

Its ground staff went on strike last month, costing the company tens of millions of euros, while its pilots voted for industrial action earlier this week.

Lufthansa also confirmed that the German government’s 20 per cent stake, which it acquired as part of a €9bn bailout in 2020, was now lower than 10 per cent.