Lufthansa loses 1,3 billion euros in the third quarter

Lufthansa aircraft at Munich Airport (Photo: Robert Spohr).
Lufthansa aircraft at Munich Airport (Photo: Robert Spohr).

Lufthansa loses 1,3 billion euros in the third quarter

Lufthansa aircraft at Munich Airport (Photo: Robert Spohr).
Advertising

The Lufthansa Group lost around 2020 billion euros in the third quarter of 1,3 due to the corona pandemic. The group emphasizes, however, that 10,1 billion euros in liquid funds are available. Of this amount, 6,3 billion euros is accounted for by government aid that has not yet been called up.

The adjusted EBIT in the third quarter of 2020 changed its sign, because in the same period of the previous year it was positive at 1,3 billion euros. Now there is a minus in front of the same sum. The operating cash outflow, before changes in working capital and investments, averaged around 200 million euros per month. In the same period, sales fell to 2,7 billion euros (previous year: 10,1 billion euros). The group result was minus 2 billion euros (previous year: plus 1,2 billion euros). In the third quarter, it was possible to reduce operating expenses by 43 percent compared to the previous year, also due to significantly lower fuel costs, fees and the decline in other costs that are directly dependent on the scope of the flight program. By using short-time working for large parts of the workforce and other measures, it was possible to reduce fixed costs by more than a third.

“With strict cost savings and the expansion of our flight program, we were able to significantly reduce the operating cash outflows in the third quarter compared to the previous quarter. Lufthansa Cargo also contributed to this with a strong performance and a positive result of 169 million euros. We are consistently pursuing this path. In the course of the coming year we want to return to a positive operating cash flow. To this end, we are pressing ahead with restructuring throughout the Group and making the Lufthansa Group more efficient in the long term in all areas, ”said Carsten Spohr, CEO of Deutsche Lufthansa AG.

The Lufthansa Group achieved a turnover of 11 billion euros in the first nine months of this year (previous year: 28 billion euros). Adjusted EBIT in this period was minus 4,1 billion euros (previous year: plus 1,7 billion euros). The group result was minus 5,6 billion euros (previous year: plus 1 billion euros). The result was burdened by non-cash special effects. For example, write-downs of 1,4 billion euros were made on 110 aircraft or rights of use for which a resumption of operations is no longer planned. The net debt at the end of the third quarter was 8,9 billion euros (December 31, 2019: 6,7 billion euros). Compared to the end of 2019, the equity ratio fell by 15,4 percentage points to 8,6 percent (December 31, 2019: 24 percent). Network Airlines' adjusted EBIT for the nine months was EUR -3,7 billion. Eurowings recorded a loss of 466 million euros.

The freight sector increased

At Lufthansa Cargo, however, increasing sales were recorded. According to the group, this is also due to the fact that the cargo holds of the passenger planes have disappeared. The Cargo subsidiary recorded a four percent increase in sales in the first nine months of 2020. Thirteen Boeing 13Fs and six McDonnell Douglas MD-777Fs were in use at Lufthansa Cargo and Aerologic. The result after nine months rose to 11 million euros (previous year: minus 446 million euros).

In contrast, Lufthansa Technik's figures fell to minus 208 million euros in the same period (previous year: plus 351 million euros). The result of the LSG Group is also negatively impacted by the worldwide decline in air traffic and the associated collapse in demand for catering and fell to minus 269 million euros in the first three quarters (previous year: plus 93 million euros).

80 percent fewer passengers

In the third quarter of 2020, the airlines in the Lufthansa Group carried 8,7 million passengers, 20 percent of the previous year. The supply decreased to 22 percent of the previous year's level. The seat load factor was 53 percent, 33 percentage points below the previous year's figure. The freight offer fell by 47 percent due to a lack of capacity on passenger aircraft. The decrease in freight kilometers sold was 34 percent. This reflects a payload factor of 14 percent higher by 73 percentage points.

In the first nine months, the airlines in the Lufthansa Group carried a total of 32,2 million passengers, which corresponds to 29 percent of the previous year. The supply decreased to 33 percent of the previous year's level. The seat load factor in this period was 68 percent, 15 percentage points lower than in the previous year. The freight supply has fallen by 40 percent, the freight kilometers sold by 33 percent. This results in a payload factor of 7 percent higher by 68 percentage points.

Group expects “one-time costs” for staff in the fourth quarter

“People all over the world have a great longing to travel again soon. Together with our partners, we are ready and do everything we can to fulfill this request as quickly as possible and with the highest hygiene and safety standards. It is now a matter of reconciling health protection and freedom of travel, for example through comprehensive rapid tests, ”explains Spohr.

Lufthansa assumes that demand will continue to be low in the coming months. In the months of October to December 2020, the group will offer a maximum of 25 percent of the previous year's capacity. The hub strategy should be helpful here, because it is believed that many point-to-point routes are uneconomical. It is assumed that in the fourth quarter "non-cash one-off and restructuring expenses, the amount of which depends primarily on the further progress of the negotiations with the social partners" will be pending.

The average monthly operating cash outflow, without taking into account changes in working capital, investments and one-off and restructuring expenses, is to be limited to around 350 million euros in the fourth quarter. The decline in adjusted free cash flow will probably be less in the fourth quarter than in the third quarter due to the significantly lower volume of ticket refunds.

The group continues to see itself on course to return to positive operating cash flow in the course of 2021. The prerequisite for this is that the pandemic situation allows capacity to be increased to around 50 percent of the pre-crisis level. A major shutdown of operations was decided for the coming winter months. In the winter flight schedule, 125 fewer aircraft will be used than originally planned. In administrative areas, only legally required activities that are necessary for operations and related to the necessary restructuring will take place.

“We are at the beginning of a winter that will be tough and challenging for our industry. We are determined to take advantage of the necessary restructuring to further expand our relative competitive advantage. Our aim remains to be number one among the airline groups in Europe even after the crisis, ”said Carsten Spohr.

The Lufthansa figures at a glance:

Lufthansa Group   January - September July September
2020 2019 Δ  20202019 Δ  
Sales Million EUR 10.99527.524-60% 2.66010.108-74% 
of which traffic revenue Million EUR 7.40421.405-65% 1.7638.030-78%  
EBIT Million EUR -5.8571.637--2.3891.220- 
Adjusted EBIT Million EUR -4. 1611.715--1.2621.297- 
Group result Million EUR -5.5841.038--1.9671.154- 
Earnings per share  EUR -10,792,18--3,802,43- 
         
total assets Million EUR 39.01044.187-12%    
Operating cash flow Million EUR -1.5983.735--1.961 1.342  
Gross investment Million EUR 1.0232.785-63%126881-86%  
Adjusted free cash flow Million EUR -2.579685- -2.069 416 -  
         
Adjusted EBIT margin in %    -37,86,2-44,0 P.-47,412,8-60,2 P. 
         
Employees as of 30.09/XNUMX  124.534 138.350-10%    
          

Media Relations

Leave a Comment

Your e-mail address will not be published. Required fields are marked with * marked

This website uses Akismet to reduce spam. Learn more about how your comment data is processed.

Editor of this article:

René Steuer is an editor at Aviation.Direct and specializes in tourism and regional aviation. Before that, he worked for AviationNetOnline (formerly Austrian Aviation Net), among others.
[ssba buttons]

Nobody likes paywalls
- not even Aviation.Direct!

Information should be free for everyone, but good journalism costs a lot of money.

If you enjoyed this article, you can check Aviation.Direct voluntary for a cup of coffee Coffee trail (for them it's free to use).

In doing so, you support the journalistic work of our independent specialist portal for aviation, travel and tourism with a focus on the DA-CH region voluntarily without a paywall requirement.

If you did not like the article, we look forward to your constructive criticism and / or your suggestions for improvement, either directly to the editor or to the team at with this link or alternatively via the comments.

Your
Aviation.Direct team
paywalls
nobody likes!

About the editor

René Steuer is an editor at Aviation.Direct and specializes in tourism and regional aviation. Before that, he worked for AviationNetOnline (formerly Austrian Aviation Net), among others.
[ssba buttons]

Nobody likes paywalls
- not even Aviation.Direct!

Information should be free for everyone, but good journalism costs a lot of money.

If you enjoyed this article, you can check Aviation.Direct voluntary for a cup of coffee Coffee trail (for them it's free to use).

In doing so, you support the journalistic work of our independent specialist portal for aviation, travel and tourism with a focus on the DA-CH region voluntarily without a paywall requirement.

If you did not like the article, we look forward to your constructive criticism and / or your suggestions for improvement, either directly to the editor or to the team at with this link or alternatively via the comments.

Your
Aviation.Direct team
paywalls
nobody likes!

Leave a Comment

Your e-mail address will not be published. Required fields are marked with * marked

This website uses Akismet to reduce spam. Learn more about how your comment data is processed.

Advertising