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Global Economy

Lufthansa is ramping up flights more slowly

Despite good figures and a continued high demand for tickets, Lufthansa is expanding flight operations in the summer more slowly than previously planned. The reason for this is the shortage of staff, which is currently severely restricting operations at airports and airlines.

From June to September, i.e. in the third quarter, 80 percent of the capacity from the pre-crisis year 2019 is planned for the group’s passenger airlines, Lufthansa announced today. In the second quarter it was still 74 percent. So far, 85 percent of the level before the Corona crisis was targeted for the third quarter. The occupancy rate for the year as a whole should remain at 75 percent.

Thousands of flights canceled

The core Lufthansa brand alone has had to cancel more than 7,000 flights. Other major airlines such as Air France-KLM and IAG also scaled back their plans for the summer quarter by five percentage points to 80 to 85 percent of all passenger flights.

A warning strike by the Verdi union in the collective bargaining dispute over the wages of around 20,000 Lufthansa ground workers led to more than 1,000 losses. Since June, this has caused problems for many travelers who want to travel abroad again after two years of the pandemic and who arrive at their destination with sometimes considerable delays.

Group back in the black

The current travel chaos has not harmed the German airline financially. On the one hand, it made compensation payments of 158 million euros to customers. On the other hand, with higher occupancy, average yields, an indicator of ticket prices, rose by 24 percent compared to the same period last year. They were even ten percent above the pre-crisis level.

In the second quarter, the group returned to profitability for the first time since the pandemic. The bottom line is that the MDAX group earned 259 million euros after a loss of 756 million euros a year earlier. The freight subsidiary Lufthansa Cargo in particular saved Lufthansa's overall result thanks to strong demand in the logistics business. With the exception of the Swiss subsidiary Swiss, all Lufthansa passenger airlines made a loss in the second quarter. Air transport continues to benefit from the massive disruptions in sea freight.

The group's sales rose to 8.5 billion euros – that was a good two and a half times as much as in the same period last year. The airline now expects adjusted operating profit of more than half a billion euros for 2022 as a whole.

5000 new employees

The first half of the year was challenging for passengers and employees, explained Lufthansa boss Carsten Spohr: "Globally, the airline industry was reaching its operational limits." Nevertheless, the management is optimistic about the future. A few weeks ago, Spohr apologized for having saved too much in one place or another. During the Corona crisis, which caused air traffic to collapse, the airline group reduced the number of employees from around 139,000 worldwide to a good 100,000.

"In addition to the achieved return to profitability, top products for our customers and prospects for our employees now have top priority again," explained the Lufthansa boss. The group is now planning thousands of new hires. In the second half of the year, around 5,000 employees are to be hired – in the cockpit, cabin and on the ground. In the coming year there will be as many again.

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