Lufthansa Group has published its latest financial and capacity update, as the Covid-19 pandemic continues to weigh heavily on its member carriers.
The group operated at just 21 per cent capacity in the first quarter of 2021 (compared to the same period in 2019), and currently has an operating cash burn of €235 million per month.
Lufthansa Group said that “the evolution of the pandemic is causing continued travel restrictions in almost all parts of the world”, with demand “expected to only recover gradually in the second quarter”.
But striking a positive note the group said that “as a result of the progress of vaccinations and the further availability and growing acceptance of testing possibilities, the company expects a significant market recovery in the second half of the year”.
The company expects full year capacity to be around 40 per cent of pre-crisis levels, and said that it will operate “the largest selection of tourist destinations ever offered at Lufthansa Group Airlines this summer”.
In February Lufthansa announced 20 new leisure routes from Frankfurt and a further 13 new destinations from Munich for this summer, with a “special focus” on routes to the Caribbean, the Canary Islands and Greece.
And the same month Austrian’s CCO Michael Trestl said that there would be a “clear focus on tourist destinations” this summer.
“The longer the crisis lasts, the greater people’s desire to travel again becomes,” said Carsten Spohr, CEO of Deutsche Lufthansa AG.
“We know that bookings shoot up wherever restrictions are loosened and travel becomes possible again. Given the foreseeable major advances in vaccination rates, we expect demand to rise sharply from the summer onwards. Encouraging signals, such as the announcement by the EU Commission that it will once again allow vaccinated passengers from the USA to travel to Europe, confirm our confidence.
“By contrast, the first quarter was still completely dominated by the pandemic. Thanks to consistent cost savings, we were nevertheless able to achieve better results than in the previous year. The changes already implemented in the Group are showing effect. We will not ease in our efforts to further modernize the Lufthansa Group, to make it leaner, more efficient, and to maintain our position among the world’s leading airlines.”
The group said it currently had liquidity of €10.6 billion, including “untapped funds of the governments’ stabilization measures and loans amounting to around EUR 5.4 billion”.
Last month Lufthansa Group reported a net loss of €6.7 billion for 2020, compared to a profit of €1.2 billion in 2019.