Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Lufthansa narrows loss on cost cuts, booking recovery

Stock MarketsAug 05, 2021 07:27AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Lufthansa planes are seen parked on the tarmac of Frankfurt Airport, Germany June 25, 2020. REUTERS/Kai Pfaffenbach///File Photo

By Ilona Wissenbach and Tomasz Janowski

FRANKFURT (Reuters) -Germany's Lufthansa said on Thursday recovering air travel and progress on cost savings helped the airline further narrow its losses in the second quarter and record cash inflow for the first time since the start of the coronavirus crisis.

The group, which also owns Eurowings, Swiss, Brussels and Austrian Airlines, reported its adjusted operating loss narrowed to 952 million euros ($1.13 billion) from 1.7 billion euros a year earlier, slightly below the 971 million euros forecast in a company-provided poll.

Lufthansa said the easing of travel curbs and pent-up demand drove significant recovery during the quarter and together with cost savings, which included job cuts, helped stem the cash bleed and deliver a 340 million euro cash inflow.

"The fact that more than 30,000 colleagues have left us in the process so far hurts us all, but is unavoidable to sustainably save the more than 100,000 remaining jobs," Chief Executive Carsten Spohr said in a statement.

Lufthansa shares were up around 0.3% in mid-morning trade.

Bernstein analysts welcomed the progress in restructuring, but noted uncertainty about the group's capital-raising plans.

"There is still no decision around the size and timing of an equity raise, previously planned to be before the election in September – and still top of investors' minds," they said in a note.

Lufthansa said its airlines carried 7 million passengers in the quarter, 18% of 2019 levels, though the numbers improved through the quarter to reach 40% at the end of June. Revenues rose 70% from last year to 3.2 billion euros, a touch below analysts' forecast.

CAUTIOUS OUTLOOK

Rivals, including Air France-KLM and British Airways owner IAG (LON:ICAG) also reported a return to positive cash flow, but like IAG, Lufthansa was more cautious about its outlook than some competitors.

While it predicted high tourist demand and a gradual recovery in business travel in the second half, the group kept its full-year capacity target at 40% of pre-crisis levels and forecast it reaching 50% in the third quarter.

EasyJet and Ryanair, low-cost airlines with no transatlantic routes hit by U.S. curbs on inbound travel, forecast reaching two-thirds of capacity, and Air France-KLM saw it at 60% to 70%.

Lufthansa, which in June laid out plans to return to profitability with fewer planes and staff than it had before the pandemic, said it had already reached half of the 3.5 billion euros in cost cuts targeted by 2024. That was six months ahead of plan, helped by better than expected uptake of voluntary redundancy programmes in Germany and Switzerland.

The group said its freight business made a record profit, while its service arm returned to the black during the quarter.

($1 = 0.8450 euros)

Lufthansa narrows loss on cost cuts, booking recovery
 

Related Articles

Costco Continues to Beat S&P 500
Costco Continues to Beat S&P 500 By TipRanks - Sep 26, 2021

JP Morgan has upped its Costco Wholesale (NASDAQ:COST) price target to $502 from $475, while keeping its overweight rating. JP Morgan is one of several investment firms that raised...

Nike: Growth Company with Big Market Opportunity
Nike: Growth Company with Big Market Opportunity By TipRanks - Sep 26, 2021

Nike (NYSE:NKE) is still a growth company with plenty of market opportunities ahead, according to its Executive Vice President and Chief Financial Officer Matt Friend. Friend...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email