• Joe Breitfeller

Lufthansa Group Reports Adjusted Third Quarter EBIT of €1.3B on Revenue of €10.2B

Updated: Jan 11, 2020

On Thursday, the Lufthansa Group announced third quarter earnings of €1.3B versus €1.4B in Q3 2018, a slight decline attributable to higher fuel costs and a general economic slowdown. The North Atlantic business remains strong and full year guidance is confirmed.

Lufthansa Network Airlines - Courtesy Lufthansa Group

Today, the Lufthansa Group, parent company of Lufthansa, SWISS, Austrian, Brussels and Eurowings reported third quarter earnings. Additional units of the airline conglomerate include Lufthansa Cargo, Lufthansa Technik and the LSG Group. Revenue increased 2% to €10.2 from €10B in Q3 2018, while adjusted EBIT (earnings before interest and taxes) declined 8% to €1.3B versus €1.4B in the same period last year. Fuel costs for the third quarter increased €171M versus Q3 2018, largely due to currency fluctuations. Adjusted EBIT margin was 12.7%, down from 14.1 in Q3 2018. In today’s announcement, Deutsche Lufthansa AG, Chairman and CEO, Carsten Spohr stated,

“Our airlines were able to translate their premium quality and market strength into solid third quarter earnings. At Eurowings the turnaround measures are showing first results; and at Austrian Airlines, Brussels Airlines and Lufthansa Cargo we will be taking tangible corrective action to improve earnings. As Europe’s leading airline group, we are on a sound and stable strategic course.”

The Lufthansa Group’s North Atlantic business remains robust and unit costs have been substantially reduced across the network. While network airlines will grow moderately in 2019/2020, Eurowings will reduce capacity. Eurowings’ third quarter adjusted EBIT increased 39% to €169M versus €122 in the third quarter of 2018. For the first nine months of the year, Eurowings’ adjusted EBIT was (€104M) versus (€98M) in Q3 2018. The Eurowings subsidiary is expected to return to profitability by 2021 and ultimately achieve a 7% operating margin.

At the company’s other operating units, results were mixed with Lufthansa Cargo posting a nine-month loss of €33M and Lufthansa Technik earnings up 10% to €371M. The LSG Group reported nine month earnings of €93M versus €99M during the first three quarters of 2018. Lufthansa Cargo is undergoing a fleet standardization process and all ten of their Boeing MD-11 freighters will be withdrawn from service by year-end 2020. The company will add two Boeing 777Fs, bringing the total to seven.

Lufthansa Group subsidiary Austrian Airlines also announced a major realignment today to help combat intense budget airline competition in Vienna.

Source: Lufthansa Group