Fewer casualties
Lufthansa and KLM are expecting a record summer – despite rising ticket prices
According to Lufthansa, the past few weeks have shown that the desire to travel has returned. The airline expects a record summer.
© Hannes P. Albert / Picture Alliance
Both Lufthansa and KLM trimmed their losses in the first quarter. The airlines are expecting more vacation trips than ever before, despite rising ticket prices.
Lufthansa is expecting a “record summer”: “The restrictions on air traffic have largely been overcome. We are now mentally overcoming the crisis,” said Lufthansa boss Carsten Spohr on Thursday when the quarterly figures were presented. The past few weeks have clearly shown how great the need is for people to travel. New bookings with the airline increased “from week to week”, especially for vacation and private trips. For the summer, the group even expects more holidaymakers than ever before.
Lufthansa offers more destinations
With more than 120 holiday destinations, Lufthansa and its subsidiaries are offering “more choice of tourist destinations than ever before”, as the company announced. In the summer, more people are expected to fly with the group’s airlines than ever before. Business travel is also recovering. This year they want to offer 75 percent of the pre-crisis capacities in the passenger business.
In the first quarter, Lufthansa’s revenue doubled year-on-year to EUR 5.7 billion. Lufthansa was able to reduce the loss – in spring 2021 still at one billion euros – to 584 million euros, 44 percent less than in the same quarter of the previous year.
Lufthansa increases ticket prices
Due to the high demand and also due to rising price levels, the group expects that sales for the full year 2022 will be “at least in the high single-digit percentage range” above that of the previous year and thus also higher than before the pandemic in 2019. An accurate forecast for the However, the board of directors still does not dare to join the group – also because of the recent extreme jumps in the price of kerosene. The development of fuel costs is “not exactly predictable”
The development of fuel costs is forcing airlines to increase ticket prices
© Patrick Pleul / Picture Alliance
The effects of the Ukraine war and the significant rise in inflation on consumer behavior are “unpredictable”. Customers also have to adjust to higher ticket prices when it comes to air tickets: “We have to pass on the rising costs to our customers,” explained CFO Remco Steenbergen.
KLM also expects a successful summer season
The situation is similar with the French-Dutch airline KLM. On Thursday, the company also announced rising ticket prices as a result of increased fuel costs. However, the demand for tickets has recovered. This development paves the way for a successful summer season, CEO Ben Smith said in a statement.
In the first quarter, Air France-KLM achieved sales of a good 4.4 billion euros – more than twice as much as a year earlier. The airlines in the group carried almost 14.6 million passengers, around three times as many as in the same period of the previous year, which was characterized by the lockdown. In the summer, the airline wants to offer up to 90 percent of the pre-crisis capacities. Smith expects earnings to be well in the black during the key summer quarter from July through September.
Just like Lufthansa, the losses in the first quarter fell significantly: from 1.5 billion to 552 million euros, as the company announced. In the three months from January to March, three times as many passengers flew with the group’s airlines as in the same period last year. Sales doubled to 4.4 billion euros.