European aviation giant Lufthansa Group reported higher than expected quarterly earnings on Thursday (31 October). The company expects that a recent increase in corporate travel demand will continue into the fourth quarter, even as US government spending has declined due to the ongoing government shutdown.
The group, which includes Lufthansa, Austrian Airlines, Brussels Airlines, Swiss and ITA Airways, reported an operating profit of €1.33 billion between July and September, marking a 1 per cent decline compared to the same period last year.
Group-wide revenues, however, increased 4 per cent year on year to €11.2 billion and the company confirmed it is “on course” to achieve its full-year forecast of “significant earnings growth” in 2025.
Lufthansa Group chairman and CEO Carsten Spohr said: “Our review of the third quarter is overall positive. We have had the best summer in terms of our flight operations in the last decade – with regularity of over 99 per cent and a double-digit improvement in punctuality. At the same time, the long-awaited aircraft deliveries are finally picking up speed, as are the extensive product improvements on our long-haul fleets.
“In addition, demand remains stable, with the premium segment continuing to be particularly strong, and the booking outlook for the fourth quarter is positive,” he said in a statement.
During an earnings call on Thursday, Spohr said corporate sales had “accelerated in the last few months”, with demand growth largely driven by the tech, consulting and finance industries.
“It’s not crazy growth but compared to what we’ve seen for quite a few years, it’s worth mentioning,” he said.
Sporh stated that, aside from the recent US government shutdown, there has been steady corporate demand from the US, noting that the US Government is the group’s largest corporate customer. He also mentioned that corporate demand from Germany is experiencing some growth.
Spohr added that the Trump administration’s ‘Liberation Day’ tariff announcement in April caused a drop in European demand for US flights in Q3, but did not affect US outbound demand.
Overall revenue for the group’s airline brands during the third quarter increased 1 per cent to €8.9 billion, with an operating profit of €1.2 billion – which it said was a “solid achievement” given the market environment in the quarter.
Revenue per available seat kilometre for the quarter fell by 2.2 per cent year on year due to the “highly competitive environment” in continental Europe and an expected temporary slowdown in North Atlantic demand, Lufthansa said.
Cost cutting measures at its flagship carrier Lufthansa Airlines also contributed “tangible” results, with the carrier reporting an improved operating result despite a “challenging trading environment”.
The group said advance bookings for the fourth quarter indicate “a more stable demand environment” for all regions, with current bookings roughly in line with the previous year.
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