The Lufthansa Group has continued and even accelerated along its path of operational and economic recovery in the past three months. We achieved the three major objectives that we set at the start of the pandemic: We have sustainably secured more than 100,000 jobs. We have maintained our position among the top five airline groups worldwide. And we have become leaner and more efficient as a company.
Demand for air travel increased significantly during the first half-year of 2022 - later than originally expected, but all the stronger for it. Hardly anyone would have thought this development was possible at the start of the year, when the Omicron variant was spreading rapidly. But it clearly shows that after more than two years of the pandemic, people want to travel again.
So we expanded our flight capacity in response. However, it has turned out that the complex air traffic system needs time to fully ramp up again. The processes involved in handling flights were and remain under severe pressure, both at the airlines and at system partners such as airport ground services, security and immigration controls, and air traffic control. We are also reaching the limits of our staff capacities, due to the extra work required to deal with flight irregularities and a high sickness rate.
In order to relieve the pressure on the air transport system, we have implemented a comprehensive package of operational measures. We also removed a large number of flights from the schedule to stabilise the system at a whole, primarily at our hub in Frankfurt. A stable flight schedule is currently our top priority. We are very pleased to see that other airlines flying to and from Frankfurt are now also contributing to reducing the number of take-offs and landings by canceling flights themselves.
Nevertheless, we expect the situation to remain demanding for both customers and employees in the weeks ahead. In our service centers, we have hired many new employees and are increasingly offering automated solutions and self-service options for our passengers to reduce waiting times. On board, we upgraded our catering offer. Beyond these short-term improvements, the introduction of new seats and services in all four travel classes next year will highlight that Lufthansa is and remains a premium airline. Our employees on the ground and on board are key to our premium proposition. Their performance is exceptional, especially in view of the current challenges. Together we will do everything we can to offer our passengers the premium experience that they have come to expect from us.
Financially, we made further significant progress in the first half-year of 2022. We were able to considerably reduce the operating loss compared with the previous year and generate positive Adjusted EBIT of nearly EUR 400m in the second quarter. Positive contributions were made in particular by Lufthansa Cargo with another record result, Lufthansa Technik, and our progress in implementing the cost reduction program. The Passenger Airlines result improved primarily due to a strong increase in yields and significantly higher load factors. Nevertheless, the segment result remained negative in the second quarter.
Due to strong bookings and strict working capital management, Adjusted free cash flow reached almost EUR 3bn in the first half-year of 2022. We were therefore able to significantly reduce our debt. The pension deficit has also narrowed significantly. Also with our equity position now being back to almost EUR 8bn, we are making good progress in overcoming the financial impact of the crisis.
For the full year 2022, we now expect to be able to achieve a positive Adjusted EBIT of over half a billion euros, assuming no material changes in the economic environment in the second half year. Above all, a strong summer quarter with a continued economic recovery at the Passenger Airlines and a strong ongoing earnings performance at Lufthansa Cargo are expected to contribute to this.
We are pleased that you are accompanying us on our path to a new normal and new strength. The current system-wide disruptions are very frustrating for everyone involved. But we are glad to once again fulfill our purpose of connecting people, cultures and economies with only few restrictions remaining. We look forward to welcoming you on board our aircraft again soon.
Head of Investor Relations
Deutsche Lufthansa AG
Revenue €m
Adjusted EBIT €m
The Lufthansa Group’s performance improved significantly over the course of the first half-year of 2022. Although the first months of the year were still burdened by the spread of the Omicron variant, demand for flights rose significantly over the remainder of the half-year. Capacity at the Passenger Airlines was expanded by more than 50% from the first to the second quarter of 2022. Overall, capacity was 162% up on the year in the first half of 2022 and was at 66% of its pre-crisis level in 2019.
Revenue for the Lufthansa Group increased accordingly by 140% year-on-year to EUR 13,825m (previous year: EUR 5,771m).
The war in Ukraine had a negative impact on the Lufthansa Group's results due to the significant increase in jet fuel prices. However, demand was hardly affected.
The operating loss was significantly reduced compared with the previous year. Adjusted EBIT came to EUR -198m (previous year: EUR -1,875m). However, positive Adjusted EBIT of EUR 393m was reported in the second quarter 2022 (previous year: EUR -827m). The Adjusted EBIT margin was -1.4% (previous year: -32.5%).
The Logistics and MRO segments were the main contributors to the positive result. In the Passenger Airlines segment, SWISS reported positive earnings, whereas the other Group airlines posted operating losses.
Further progress was made with implementing the restructuring programme. Measures taken by 30 June 2022 account for more than 85% of the EUR 3.5bn in total annual savings targeted from 2024 onwards.
Adjusted free cash flow came to EUR 2,902m (previous year: EUR -571m) and profited primarily from improvements in working capital management, strong new bookings and the associated advance payments for flights in the summer of the reporting year, as well as from disciplined investing activities.
Specific CO2 emissions per passenger-kilometre were 93.4 grammes in the first half-year of 2022, 11% lower than the previous year (previous year: 105.5 grammes). The reason for the year-on-year decline was essentially the better load factors.
| Jan – Jun 2022 | Jan – Jun 2021 | Change in % | ||
|---|---|---|---|---|
| Total revenue | €m | 13,825 | 5,771 | 140 |
| of whichtraffic revenue | €m | 10,661 | 3,637 | 193 |
| Operating expenses1) | €m | 14,964 | 8,270 | 81 |
| Adjusted EBITDA1) | €m | 930 | -750 |
|
| Adjusted EBIT1) | €m | -198 | -1,875 | 89 |
| EBIT | €m | -300 | -2,114 | 86 |
| Net profit/loss | €m | -325 | -1,805 | 82 |
| Jan – Jun 2022 | Jan – Jun 2021 | Change in % | ||
|---|---|---|---|---|
| Total assets | €m | 46,938 | 40,838 | 15 |
| Equity | €m | 7,927 | 3,145 | 152 |
| Equity ratio | % | 16.9 | 7.7 | 9.2 pts |
| Net indebtedness | €m | 6,396 | 8,930 | -28 |
| Pension provisions | €m | 3,280 | 7,607 | -57 |
| Cash flow from operating activities1) | €m | 4,441 | 47 | 9,349 |
| Gross capital expenditure | €m | 1,368 | 612 | 124 |
| Net capital expenditure | €m | 1,381 | 443 | 212 |
| Adjusted free cash flow1) | €m | 2,902 | -571 |
|
| Jan – Jun 2022 | Jan – Jun 2021 | Change in % | ||
|---|---|---|---|---|
| Adjusted EBITDA-margin1) | % | 6.7 | -13.0 | 19.7 pts |
| Adjusted EBIT-margin1) | % | -1.4 | -32.5 | 31.1 pts |
| EBIT-margin | % | -2.2 | -36.6 | 34.4 pts |
| Jan – Jun 2022 | Jan – Jun 2021 | Change in % | ||
|---|---|---|---|---|
| Share price as of 30 Jun 2) | € | 5.56 | 6.77 | -18 |
| Earnings per share | € | -0.27 | -3.02 | 91 |
| Jan – Jun 2022 | Jan – Jun 2021 | Change in % | ||
|---|---|---|---|---|
| Employees as of 30 Jun | number | 106,296 | 108,072 | -2 |
| Jan – Jun 2022 | Jan – Jun 2021 | Change in % | ||
|---|---|---|---|---|
| Flights | number | 370,430 | 120,776 | 207 |
| Passengers | thousands | 42,382 | 10,041 | 322 |
| Available seat-kilometres | millions | 115,617 | 44,190 | 162 |
| Revenue seat-kilometres | millions | 85,942 | 21,626 | 297 |
| Passenger load factor | % | 74.3 | 48.9 | 25.4 pts |
| Available cargo tonne-kilometres | millions | 6,667 | 5,369 | 24 |
| Revenue cargo tonne-kilometres | millions | 4,251 | 4,075 | 4 |
| Cargo load factor | % | 63.8 | 75.9 | -12.1 pts |
1) Previous year's figures have been adjusted due to amendments in the definition of the figures.
2) Share price development adjusted for the effects of the issue of new shares in connection with the capital increase in September 2021.
Date of publication: 4 August 2022.
Starting from a year-end price of EUR 6.18 in 2021, the Lufthansa share price developed much more positively than the market as a whole in the first half-year of 2022. Driven by the expectation of an incipient recovery in demand after the spread of the omicron variant in the months before, the share price rose to EUR 7.81 by mid-February. Subsequently, however, the share price initially fell, in particular due to the outbreak of the Ukraine war and the associated rise in the oil price, emerging economic concerns in connection with sharply rising inflation and operational impairments in the European aviation system, and was quoted at EUR 5.56 on 30 June 2022. The share price thus recorded a loss of 10% in the first half-year 2022.
The Lufthansa share nevertheless performed better than the shares of its relevant competitors Air France-KLM and IAG, whose prices fell by 43% and 24% respectively. The prices of the European low-cost carriers also underperformed the Lufthansa share. The share of WIZZair in particular suffered heavily from the effects of the Ukraine war due to the airline's regional focus on Eastern Europe and its decision not to hedge fuel expenses, falling by 58% in the first half of 2022. The benchmark index MDAX fell by 26% in the same period.
The Group's financial outlook remains subject to a high degree of forecast uncertainty caused amongst others by the recession risk inherent in the current outlook for the global economy, the risk of energy prices remaining high due to the war in Ukraine and the further uncertain development of the coronavirus pandemic. All of which has potentially significant influence on consumer confidence and demand for air travel in the remainder of the year. The further progress of negotiations with the collective bargaining partners and any labor disputes may also influence the Group's financial performance in the second half of the year.
Lufthansa Group expects to be able to expand the capacity offered by its airlines in the full year of 2022 compared with the previous year. The capacity expansion will be driven largely by short-haul tourist routes in Europe. The Lufthansa Group also anticipates a continued recovery on long-haul routes and in the business travel segment, albeit at a lower level.
Overall, subject to the areas of uncertainty described above and the potential impact of operational disruption in the European aviation system on the Group’s airlines, the Lufthansa Group expects the offered capacity of the Passenger Airlines in fiscal year 2022 to be at around 75% of the pre-crisis capacity.
Primarily due to the further recovery at the Passenger Airlines, continuously favorable supply and demand dynamics in the Logistics segment, and a continued upswing in the MRO segment, the Lufthansa Group expects revenue to increase in 2022. However, the revenue level of the pre-crisis period will probably not yet be reached in 2022.
Assuming that the economic environment does not change materially in the second half of the year, the Lufthansa Group expects to be able to achieve an Adjusted EBIT of over EUR 0.5bn again for the full year 2022. The result in the Logistics segment should be broadly in line with the record level in the previous year. The MRO segment is also expected to make a positive contribution to earnings. The Adjusted EBIT loss in the Passenger Airlines segment is projected to decline. Further progress in implementing the cost-reduction program in all areas of the Group will support the earnings performance.
In view of the development in the first half of the year and despite negative seasonal effects in working capital in the second half of the year, Adjusted free cash flow is expected to be significantly positive in the year 2022 as a whole.
Specific CO2 emissions are expected to significantly decrease in 2022 compared with the previous year, in particular due to the higher load factors of flights and a higher proportion of long-haul flights.
On 10 May 2022, around 2,300 shareholders followed the virtual Annual General Meeting of Deutsche Lufthansa AG online. A total of 37.47% of the share capital was represented. Eight agenda items were put to the vote at the Annual General Meeting.
The shareholders of the Company voted by a large majority to discharge the members of the Executive Board and the Supervisory Board for the financial year 2021. The remuneration report, which was voted on for the first time, was also approved by a majority of shareholders.
Shareholders also approved the new authorization to issue convertible bonds, bonds with warrants, profit participation rights and/or participating bonds (or combinations of these instruments) and the renewal of Authorized Capital A and a corresponding amendment to the Articles of Association by a broad majority.
Logistics entrepreneur and billionaire Klaus-Michael Kühne, majority shareholder of the logistics group Kühne + Nagel and major shareholder of the Hamburg container shipping company Hapag-Lloyd, is the largest shareholder of Deutsche Lufthansa AG. According to the voting rights notification of 6 July 2022, his company Kühne Aviation GmbH holds 15.01% of the shares in Deutsche Lufthansa AG.
Klaus-Michael Kühne has thus replaced the Economic Stabilisation Fund (ESF) of the Federal Republic of Germany as the largest shareholder. According to the voting rights notification of 28 July 2022, the ESF had fallen below the 10 per cent threshold and held 9.92 per cent of the shares in Deutsche Lufthansa AG at that time. Under the contractual terms of the stabilisation measures, the ESF is obliged to sell its shareholding in full by October 2023.
The Lufthansa Group is continuing the modernisation of its fleet. The Executive Board has decided to purchase seven Boeing 787-9 long-haul passenger aircraft, three Boeing 777F freighter aircraft (current technology) as well as seven Boeing 777-8F freighter aircraft (new technology). In addition, leases for two Boeing 777F freighter aircraft (current technology), which run until 2024, will be extended. The Supervisory Board already approved the acquisition and the lease extension on 9 May 2022.
The seven highly economical and fuel-efficient 787-9 passenger aircraft are intended to fill the capacity gaps created by the delayed delivery of the Boeing 777-9 (originally scheduled for delivery in 2023, currently advised in 2025). Lufthansa German Airlines will receive the aircraft, which were originally intended for other airlines, from 2025. At the same time, the delivery dates for the Boeing 787-9s already ordered from Boeing will be revised and, in some cases, brought forward to 2023 and 2024.
Demand for air freight remains persistently high. Global supply chains continue to be disrupted. To further maximize very profitable market opportunities in this business segment, Lufthansa Group is purchasing three additional Boeing 777F freighters. Additionally, contracts for two leased 777Fs will be extended.
As one of the first customers Lufthansa Group purchased seven state-of-the-art and efficient Boeing 777-8F freighter aircraft. They are based on the new technology of the Boeing 777X. The first aircraft will be delivered starting in 2027.
Carsten Spohr, Chairman of the Executive Board of Lufthansa Group, said: "We continue investing in more fuel-efficient, quieter and more economical aircraft that emit significantly less CO2. This enables us to drive our fleet modernization. By purchasing these state-of-the-art aircraft, we again underline Lufthansa Group's ability to invest in and shape the future. Once again, we are again taking the initiative and expanding our leadership role as well as taking responsibility for the environment – with premium products for our customers and a sustainable fleet."
With Boeing´s new long-haul aircraft, the Lufthansa Group will continue to modernize its fleet with aircraft among the most fuel-efficient and sustainable long-haul aircraft in their class. The Boeing 787-9 passenger aircraft consume about 25% less kerosene than their predecessors, the 777-8F freighters nearly 15% less kerosene. Both aircraft will have an equally positive effect on the carbon footprint.
The Group expects the cost benefits associated with fleet modernization to drive the achievement of its target to reach an Adjusted EBIT margin of at least 8% and a return on capital employed (Adjusted ROCE) of at least 10% by 2024.
ver.di calls for warning strike;
Vereinigung Cockpit holds strike ballot
A warning strike called by the trade union ver.di had a massive impact on air traffic on 27 July 2022, especially at Lufthansa German Airlines. ver.di represents the approximately 20,000 ground employees of Deutsche Lufthansa AG.
In Frankfurt, a total of 678 flights had to be canceled due to the strike. Around 92,000 passengers were affected.
At the Munich hub, a total of 345 flights had to be canceled. 42,000 passengers had been affected.
Michael Niggemann, Member of the Executive Board, responsible for Human Resources and Infrastructure, said: "The early escalation after only two days of negotiations in what had so far been a constructive round of collective bargaining is causing enormous damage. It affects our passengers in particular, who are impacted during the peak travel season. After the enormous efforts to stabilize our flight operations, this represents a renewed, substantial and unnecessary burden for our passengers and also for our employees beyond the strike day."
In addition, the pilots' union Vereinigung Cockpit (VC) has announced that around 98% of its Lufthansa members have voted in favour of strike actions in a ballot if no agreement is reached in the current collective bargaining negotiations. The Lufthansa Group continues to rely on a constructive solution at the negotiating table.
The Lufthansa Group and Shell International Petroleum Co Ltd have signed a Memorandum of Understanding for exploring the supply of Sustainable Aviation Fluel (SAF) at airports across the globe. The parties intend to agree on a contract for a total supply volume of up to 1.8m metric tons of SAF starting in 2024, over a term of seven years. Such an agreement would be one of the most significant commercial SAF cooperation in the aviation sector, as well as the largest SAF commitment of both companies to date.
The cooperation would enable the Lufthansa Group to promote the availability, market ramp-up and use of SAF as an essential element for a CO2-neutral future of aviation. The Lufthansa Group is already the largest SAF customer in Europe and aims to remain one of the world's leading airline groups in the use of sustainable kerosene.
SAF is aviation fuel that is produced without the use of fossil energy sources, such as crude oil or natural gas, and show a saving of CO2 compared to conventional kerosene. Various production processes exist and different feedstock are available as energy sources. The current generation of SAF, which saves 80% CO2 compared to conventional kerosene, is mainly produced from biogenic residues, for example from used cooking oils. In the long term, SAF can enable virtually CO2-neutral aviation.
The Lufthansa Group has been involved in SAF research for many years, has built up an extensive network of partnerships and is driving forward the introduction of sustainable next-generation aviation fuels in particular. Special focus is placed on the forward-looking power-to-liquid and sun-to-liquid technologies, which use renewable energies or solar thermal energy as energy carriers.
By using SAF, customers of the Lufthansa Group can already fly CO2-neutral today. In addition, they can document their reduced CO2 emissions with audited certificates and have the CO2 savings credited to their individual CO2 balance.
The Lufthansa Group is further expanding its CO2-neutral flight offers, making sustainable travel easier than ever before. For the first time, Lufthansa German Airlines, SWISS, Austrian Airlines and Brussels Airlines are offering a new fare that already includes full CO2 compensation in the price. 80% of the offsetting is done through high-quality climate protection projects and 20% through the use of sustainable aviation fuels (SAF). In the pilot project, launched on 2 August 2022, the new Green Fare will initially be offered to all guests booking their flight from Denmark, Sweden and Norway. The Lufthansa Group is the first international aviation group to offer its customers a separate ‘green fare’ for CO2-neutral flying with SAF.
The Green Fare is displayed alongside the familiar fares (Light, Classic, Flex) as an additional fare option in the online booking screen directly after the flight selection. The new offer is available in both Economy Class and Business Class for flights within Europe.
"We want to make CO2-neutral flying a matter of course in the future. To this end, we already offer our guests the most comprehensive range of services and are consistently expanding this further. As of now, we are offering a dedicated ‘green fare’ for the first time, which already includes the complete offsetting of the flight's CO2 emissions through sustainable aviation fuel and certified climate protection projects, already embedded in the price. People don't just want to fly and discover the world - they also want to protect it. We are driven by the need to support our customers with the right offers," says Christina Foerster, Member of the Lufthansa Group's Executive Board, responsible for Brand and Sustainability.
We are at your disposal to answer your questions.
Head of Investor Relations
Analyst and Investor Communication
Information published in this Shareholder Information with regard to the future development of the Lufthansa Group and its subsidiaries consists purely of forecasts and assessments and not of definitive historical facts. Its purpose is exclusively informational and is identified by the use of such terms as ‘believe’, ‘expect’, ‘forecast’, ‘intend’, ‘project’, ‘plan’, ‘estimate’, ‘assume’ and ‘endeavour’. These forward-looking statements are based on all discernible information, facts and expectations available at the time. They can, therefore, only claim validity up to the date of their publication.
Since forward-looking statements are by their nature subject to uncertainties and imponderable risk factors – such as changes in underlying economic conditions – and rest on assumptions that may not, or divergently occur, it is possible that the Group’s actual results and development may differ materially from those implied by the forecasts. The Lufthansa Group makes a point of checking and updating the information it publishes. It cannot, however, assume any obligation to adapt forward-looking statements to accommodate events or developments that may occur at some later date. Accordingly, it neither expressly nor conclusively accepts liability, nor gives any guarantee for the actuality, accuracy or completeness of this data and information.
The Lufthansa Group is a global aviation group with a total of more than 580 subsidiaries and equity investments.
Corporate responsibility, that is to say sustainable and responsible entrepreneurial practice, is an integral part of our corporate strategy. It means that we are committed to creating added value for our customers, employees and investors and to meeting our responsibilities toward the environment and society.
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