Lufthansa To Cut Costs Following Poor Results

Daniel Fowkes
01 May 2024
· Airlines 
A Lufthansa Airbus A340-300 in Frankfurt from Denver

Lufthansa Group published its first quarter financial results, which, following strike action, paint a bleaker picture than initially imagined.

Based on the first quarter results, Lufthansa says it’ll implement cost-cutting measures to ensure stability throughout the year.

Lufthansa says seeing poorer results across the first quarter is not necessarily shocking. Typically, this remains one of the slower periods.

However, for Lufthansa, the quarter was filled with strike action that significantly impacted results. During the quarter, however, the group was also able to sort out several pay disputes and thus is looking to move ahead more positively.

Lufthansa will reassess several aspects of the business in a bid to refocus for the remainder of the year and cut operating costs. First, Lufthansa says that the upcoming launch of new projects will be pushed back. Meanwhile, at its core brand, there’ll be a lot of focus on staffing.

After renegotiated staffing contracts, operating costs are expected to soar across Lufthansa Group, which saw significant pay increases. The natural increase in operating costs makes for an expensive first quarter that needs rectifying.

First Quarter Results

Lufthansa Group’s revenues increased 5% yearly to 7.4 billion euros, up from 7 billion euros in Q1 2023.

Meanwhile, an operating loss of 849 million euros was recorded, up from the loss of 273 million euros recorded during the same period one year prior.

Lufthansa forecasted an impact of around 350 million euros on its earnings thanks to the difficulties across the quarter.

24 million passengers flew with Lufthansa across the first quarter, a 12% increase. This area was a strong point despite the operational difficulties stemming from strike action. Lufthansa expects the remainder of 2024 to be strong.

Lufthansa also recorded a 12% capacity increase across its group. Meanwhile, load factors remained at 79.7%, reflecting the high levels of demand.

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