Lufthansa reports $1.7bn loss in Q2
FRANKFURT/BRUSSELS: German airline giant Lufthansa said yesterday it made a net loss of €1.5 billion ($1.7 billion) in the second quarter as the coronavirus pandemic slammed the brakes on travel.
The German flag carrier carried around 1.7 million travellers during the three months to the end of June — a 96% drop from the same period last year as lockdowns to slow the spread of the coronavirus restricted air travel worldwide.
Profit in the same period of the previous year was €754 million.
Lufthansa said demand for air travel would return to pre-crisis levels in 2024 at the earliest, as it predicted a “clearly negative” operating loss in the second half.
The group, which received a government bailout worth €9 billion, had announced in June that 22,000 jobs would have to go.
Although it had said then that it would use schemes for shorter work hours and other crisis arrangements to avoid outright redundancies, the company said yesterday that was now “no longer realistically within reach for Germany either”.
“We are experiencing a caesura in global air traffic,” Lufthansa chief executive Carsten Spohr said.
The collapse in traffic led to an 80% drop in quarterly revenue to €1.9 billion for Lufthansa Group, which also includes Austrian Airlines and Swiss. In the second quarter of last year, Lufthansa reported revenue of more than €9.5 billion.
The company said its fleet was to be permanently reduced by at least 100 aircraft, although its 2024 capacity will correspond to that of 2019.
Lufthansa previously said they would reduce its use of Airbus A380s and Boeing 747s.
In June, Lufthansa secured a €9 billion bailout from the German government, which now has a 20% stake in the group.
The airline said it now has €11.8 billion in liquidity, including government funds.
Lufthansa said it has so far reimbursed around €2 billion to customers in 2020 due to cancelled flights.
Meanwhile, Brussels Airlines, a Lufthansa subsidiary, said yesterday it lost €182 million in the first six months of 2020 because of the coronavirus crisis.
First half revenues fell to €252 million, 63% below the same period last year. Brussels Airlines transported two-thirds fewer passengers between January and June as much of the world imposed anti-virus lockdowns.
Brussels Airlines, Belgium’s biggest airline, suspended all scheduled flights from 21 March, running only special flights to repatriate Belgian and German citizens, transport medical equipment to Africa and import medical masks from China.
Commercial flying resumed on June 15 as European countries began to ease their social and economic lockdowns, but the airline’s network remains limited.
“Due to the still volatile and highly unpredictable situation worldwide, it is not possible to make forecasts for 2020 as a whole,” Brussels Airlines warned.