Deutsche Lufthansa is bracing for weaker demand in its crucial US flight operations this fall, following a boom over the summer months.
"We will be able to welcome more guests on the North Atlantic this summer than in previous years," CEO Carsten Spohr said Thursday evening at an event hosted by the Wirtschaftspublizistische Vereinigung Düsseldorf (WPV). The Lufthansa Group operates 60 flights per day to the United States. "The first quarter was better than last year. But we are seeing a leveling off in the third quarter." This trend is more pronounced for demand on flights departing from Germany than in the opposite direction. With demand in the US remaining strong and prices higher, the airline will increase the proportion of seats it markets in the US.
The North Atlantic business remains the most important profit driver for the group's passenger airlines, which, in addition to its core Lufthansa brand, include Austrian Airlines, Brussels Airlines, and Swiss, as well as the recently acquired ITA Airways.
Implementation of the turnaround program launched two years ago is progressing as planned, Spohr noted. The aim remains to achieve a gross earnings effect of 1.5 billion euros by 2026 and 2.5 billion euros by 2028. The program is not just about cost savings, but also includes investments in improved long-haul seating, which will allow Lufthansa to command higher prices.
According to Spohr, the airline is holding back on new aircraft orders for now. There will be no announcements at the Paris Air Show next week. Lufthansa is currently undertaking the largest modernization program in its history. "With 250 aircraft on order, we are currently at the limit of what we can afford," he said.
(Reporting by Tom Käckenhoff, editing by Myria Mildenberger. For questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).
