The price surge resulting from the war will increase the Lufthansa Group's fuel bill by 1.7 billion euros this year to a total of 8.9 billion euros. Streichert intends to largely offset these additional costs through higher yields and administrative savings. The duration of the windfall in Asian flight demand depends on how quickly Emirates or Etihad Airways restore their capacity and whether customers feel confident flying through hubs like Dubai or Doha. Recently, capacity returned to nearly 75 percent of pre-war levels. 'Beyond the second quarter, we remain cautious,' Streichert said.
Some industry figures, such as IATA Director General Willie Walsh, have warned that kerosene shortages could lead to flight cancellations starting in June. Spohr noted that he shares the confidence of European governments regarding supply security. While the loss of Middle Eastern shipments has created a 25 percent supply gap, half of this deficit is currently being covered by increased imports from the U.S. and Nigeria, small volumes from Israel, and slightly higher European production. In addition to strategic national reserves, commercial inventories remain available. 'Until mid-July, we can certainly assume that stocks and deliveries will be sufficient,' Spohr said.
STRIKE COSTS WEIGH ON RESULTS
Revenue reached a new first-quarter record, rising eight percent to 8.7 billion euros. During the seasonally weak first quarter, Lufthansa narrowed its loss by 110 million euros year-on-year to 612 million euros, performing better than analysts had anticipated. However, Lufthansa still lags behind its European peers: Air France-KLM reduced its typical first-quarter loss by 300 million euros to 27 million euros, bolstered by increased demand for Far East routes. British-Spanish rival IAG, which is scheduled to report on Friday, is even expected to post an operating profit.
Among the group's airlines, only the Swiss subsidiary, Swiss, turned a small profit. The flagship Lufthansa Airlines brand, currently undergoing restructuring and modernization following weak performance, reduced its loss by nearly 20 percent to 443 million euros. Strikes by cockpit and cabin crews cost 40 million euros in the first quarter. According to Streichert, the six days of industrial action in April will add another 150 million euros in costs. Spohr noted this was less than in previous strikes, as more pilots volunteered for duty and other group airlines were able to step in. The airport association ADV reported that strikes in April resulted in nearly one million fewer passengers, while the Iran conflict deterred almost 400,000 travelers from flying.
RISKS ON THE RISE
Despite the growing threat of fuel shortages, the Group is maintaining its forecast for a significant increase in adjusted operating profit over last year's nearly two billion euros. While it may not reach the levels originally expected, it should rise by approximately ten percent, Streichert said. Although Lufthansa continues to anticipate robust demand, it is slowing capacity growth this year to a maximum of two percent, down from the planned four percent. This is partly due to flight cancellations following the early retirement of regional carrier Cityline. Unprofitable short-haul routes, totaling 20,000 flights this summer, will be cut.
'Global demand for air travel remains high and is proving resilient even in times of crisis,' the MDax-listed group stated. Another strong summer travel season is expected. However, 'due to uncertainty factors, the opportunity-risk profile has shifted toward the risks.'
(Edited by Olaf Brenner. For inquiries, please contact the editorial management at frankfurt.newsroom@thomsonreuters.com)
- by Ilona Wissenbach
