Tag Archives: Brussels Airlines

Strikes weigh on Lufthansa Group’s earnings in the first quarter – outlook for summer remains positive

Group revenue increases by 5 percent to 7.4 billion euros in the first quarter
Number of passengers rises to 24 million in the first quarter
Adjusted EBIT in the first quarter at -849 million euros
Strikes impact earnings by around 350 million euros in the first quarter
Unit costs excluding strike impact below previous year
Summer with record number of holiday destinations and 16 percent more bookings than last year
Adjusted EBIT of around 2.2 billion euros expected for the full year of 2024

Carsten Spohr, Chairman of the Executive Board and CEO of Deutsche Lufthansa AG:

“We are now leaving the first quarter behind us, which was mainly impacted by strikes, and are at a turning point. We have reached long-term wage agreements for the majority of our employees. This means planning certainty and clarity for the coming years. We are still seeing strong demand, which is even significantly higher than last year for the summer. We are therefore continuing to expand our offering and are growing on long-haul routes in particular. Our planes remain well filled throughout. One thing is already clear: it will be another very strong summer. I am particularly pleased that we are continuing to see a positive trend not only among leisure but also business travelers. We are now devoting all our energy to further expanding our premium customer offers and ensuring punctual and reliable flight operations.”

Results for the first quarter of 2024

The Group increased its revenue by five percent year-on-year to 7.4 billion euros in the first quarter of 2024 (previous year: 7.0 billion euros). The Lufthansa Group recorded an operating loss (Adjusted EBIT) of 849 million euros (previous year: -273 million euros). Strikes, both by various employee groups within the Group and by employees of our system partners, had a negative impact of around 350 million euros on earnings. In addition, Lufthansa Cargo’s result declined now that the logistics industry has returned to normal after the pandemic-related exceptional economic situation. The Adjusted EBIT margin fell to -11.5 percent (previous year: -3.9 percent). The Group result fell to -734 million euros (previous year: -467 million euros).

Passenger numbers and traffic development

Demand for air travel continued to rise in the first quarter of the current year. A total of 24 million passengers flew with the airlines of the Lufthansa Group, an increase of 12 percent compared to the previous year (Q1 2023: 22 million). The Group airlines expanded their seat capacity by 12 percent year-on-year despite the strike-related flight cancellations. Compared to the pre-Crisis year 2019, this was 84 percent, around 5 percentage points lower than originally planned. Despite the significant increase in capacity, the load factor remained consistently high due to high demand. The passenger load factor amounted to 79.7 percent and was thus at the previous year’s level.

Strikes have a significant negative impact on Passenger Airlines’ earnings

The Lufthansa Group Passenger Airlines’ revenue rose by seven percent to
5.6 billion euros in the first quarter (previous year: 5.2 billion euros). They recorded an Adjusted EBIT of -918 million euros (previous year: -512 million euros). Strikes had an impact of around 300 million euros on earnings in this segment.

Yields fell by 2.5 percent compared to the previous year, partly due to the strike-related uncertainty on the customer side and the corresponding lack of high-priced last-minute bookings. Unit revenues (RASK) were 6.3 percent down on the previous year, also influenced by lower cargo revenues and significantly higher compensation payments to passengers due to the strike.

Unit costs (CASK) rose by 2.9 percent compared to the same quarter of the previous year due to the strike. Adjusted for the strike effects, however, they were 1.8 percent below the previous year despite higher expenses for fees, MRO and personnel.

Due to the high losses in the core brand Lufthansa in the first quarter (Adjusted EBIT -640 million euros), Lufthansa Airlines has initiated measures to strengthen the result this year in the short term. Among other steps, it is planned to reduce operating costs, stop new projects and assess the need for additional staff in administrative areas.

Lufthansa Technik benefits from more air traffic

Demand for maintenance, repair and overhaul services as well as other Lufthansa Technik products increased in the first quarter of 2024 due to the positive trend in air travel. Revenue increased accordingly by 15 percent year-on-year to 1.8 billion euros (previous year: 1.5 billion euros). Adjusted EBIT fell by 14 percent to 116 million euros (previous year: 135 million euros), impacted by strike-related work stoppages. Excluding this effect, which had a negative impact on earnings of around 25 million euros, earnings were up on the previous year.

In the logistics business, capacity rose by seven percent due to the expansion of air traffic and revenue tonne-kilometres also increased by ten percent. Yields were around 25 percent lower than in the same quarter of the previous year, in which the result was significantly boosted by high demand due to supply chain disruptions and the shortage of capacity as a result of the pandemic. Lufthansa Cargo thus achieved an Adjusted EBIT of -22 million euros (previous year: 151 million euros). Excluding the strike effects of 25 million euros, the quarterly result was slightly positive.

Positive Adjusted free cash flow further reduces net debt

Due to the continued high level of incoming bookings, operating cash flow amounted to around 1.3 billion euros despite the negative operating result. At 940 million euros, net investments were around ten percent below the previous year, meaning that Adjusted free cash flow amounted to 305 million euros (previous year: 482 million euros).

The Group further strengthened its balance sheet in the first quarter of 2024. Net debt decreased to 5.5 billion euros compared to the end of 2023 (December 31, 2023: 5.7 billion euros) due to the positive free cash flow. Net pension obligations fell to 2.4 billion euros due to a higher discount rate (December 31, 2023: 2.7 billion euros). At the end of March 2023, the company had liquidity totaling 10.8 billion euros (December 31, 2023: 10.5 billion euros) at its disposal. Following an upgrade by Moody’s in the first quarter, the Lufthansa Group is now the only European network airline to be consistently rated investment grade again by all four agencies in the market.

Remco Steenbergen, Chief Financial Officer of Deutsche Lufthansa AG:

“We cannot be satisfied with the operating result for the first quarter; at more than 350 million euros, the various strikes had a significant impact on our result. Nevertheless, cash flow was positive due to the continuing high demand for air travel. We were also able to further strengthen our balance sheet. In the coming months, we will work intensively to compensate for the effects of rising costs. We have taken additional measures to this end, particularly at Lufthansa Airlines, which is significantly affected by rising personnel expenses and fees. I therefore remain convinced that we will be able to achieve stable unit cost development for the year as a whole without taking the strikes in the first quarter into account.”

Bookings for summer 16 percent up on previous year

Global demand for air travel remains strong, particularly from private travelers. The company expects another very good summer of travel. Never before have so many holiday destinations been served by Lufthansa Group airlines as this year. The most popular summer destinations in 2024 are once again Spain, Portugal, Italy and Greece and, for long-haul travel, the USA, Japan and Southern Africa. This year, many holidaymakers will once again be able to afford a ticket in one of the premium classes. In addition to the very good demand in the private travel segment, the trend in the business travel segment is also positive. This applies in particular to long-haul flights. The Lufthansa Group is continuously expanding its offering here. In addition to the traditionally strong North American routes, demand from business travelers on the India and Japan routes in particular is growing this year.

Overall, bookings for the summer timetable (April to October) are 16 percent up on the previous year.

Guests can now also enjoy Lufthansa Allegris, the new travel experience on long-haul routes. Allegris will start regular scheduled service on May 1. The first Airbus A350-900 equipped with Allegris will fly from Munich to Vancouver on the Canadian West Coast. The second destination is Toronto, which will be served alternately with Vancouver on selected flights in the first few months. With further A350s delivered, the Allegris cabin will also be used on flights to Chicago and Montreal in the summer.

Financial outlook

The Lufthansa Group plans to increase available capacity in the second quarter to around 92 percent of the pre-crisis level. The increase will therefore be lower than originally planned due to further investments in operational stability and delayed aircraft deliveries. The company expects a year-on-year decline in unit revenues (RASK) in the low single-digit percentage range, partly because customers were reluctant to make short-term bookings for April and, to a lesser extent, May during the wage disputes that have now been resolved. Unit costs (CASK) are expected to increase in the low single-digit percentage range in the second quarter. Adjusted EBIT in the second quarter will therefore still be below that of the previous year. In line with the lower capacity in the first two quarters, the Lufthansa Group now expects to achieve a capacity level of around 92 percent of the pre-crisis figure for 2019 (previously: 94 percent) for the full year 2024.

In the third quarter, capacity is to be increased further to over 95 percent of the pre-crisis level. Based on incoming bookings, the Group airlines expect unit revenues (RASK) in the third quarter to be higher than in the previous year.

In the second half of the year, the Group’s operating result is expected to be higher than in the previous year. As already communicated on April 15, Adjusted EBIT for the full year is now expected to be around 2.2 billion euros (previously: stable earnings development compared to 2.7 billion euros in the previous year). For the Passenger Airlines, a decline in unit revenues (RASK) in the low single-digit percentage range and an increase in unit costs (CASK), also in the low single-digit percentage range, are expected for the full year. Excluding the effects of the strikes in the first quarter, unit costs (CASK) are expected to remain stable. Adjusted free cash flow is expected to be at least 1 billion euros (previously: at least 1.5 billion euros).

Further information

Further information on the results of individual business units will be published in the report on the first quarter of 2024. This will be published at the same time as this press release on April 30, 2024 at 07:00 CEST at www.lufthansagroup.com/investor-relations.

The traffic figures for the first quarter of 2024 will also be published at 07:00 CEST athttps://investor-relations.lufthansagroup.com/en/publications/traffic-figures.html .

		Jan – Mar 2024	Jan – Mar 2023	Change in %
Revenue and result
Total revenue	€m	7,392	7,017	5
of which traffic revenue	€m	5,903	5,708	3
Adjusted EBIT	€m	-849	-273	-211
Adjusted EBIT margin	%	-11.5	-3.9	-7.6 P.
EBIT	€m	-871	-304	-187
Net profit/loss	€m	-734	-467	-57
Earnings per share	€	-0,61	-0,39	-56
Key balance sheet and cash flow statement figures
Total assets	€m	47,358	44,904	5
Cash flow from operating activities	€m	1,311	1,581	-17
Net capital expenditures	€m	940	1,040	-10
Adjusted free cash flow	€m	305	482	-37
Employees
Employees as of 31 March	number	98,739	112,392	-12

Brussels Airlines unveils a new Tomorrowland special livery

Brussels Airlines and Tomorrowland proudly present “Amare”, the newest Belgian Icon. Amare represents unity for people all over the world. The brand-new Airbus A320neo’s livery features augmented reality, a world-first. Both partners also ramp-up efforts to make the Tomorrowland-flights more sustainable.

During an event in Brussels Airlines’ Maintenance & Engineering hangar, the new livery was presented to media, guests, and employees. The new Belgian Icon is a tribute to the world-famous music festival Tomorrowland and demonstrates once more the Belgitude of Brussels Airlines, whereby the airline brings the world to Belgium and brings the best of Belgium to the world.

The design is a world premiere: Amare is the first aircraft to feature augmented reality in its livery as the bird comes to life when scanned through specific Social Media channels such as Instagram and TikTok. This feature provides The People of Tomorrow a first augmented storytelling behind the world-famous magical creature Amare, which symbolizes unity and transcending time and space. The whole design process of the livery took about 15 months and great attention has been given to details, from the feathers of the bird to the sparkles of the fireworks transitioning into the Brussels Airlines’ logo.

The Tomorrowland experience will of course continue inside the aircraft where passengers will enjoy the impressive sound system and special mood lighting in the cabin.

Exploring the world in a more responsible way
Both partners are aware of their environmental impact and have been working to reduce it over the past few years. The new Amare is the second brand-new A320neo (with registration number OO-SBB) having joined Brussels Airlines’ fleet in December 2023.

The neo emits up to 20% less CO2 and up to 50% less noise than its predecessors. The new Amare is thus a tangible example of how Brussels Airlines and Tomorrowland are aiming to reduce their ecological impact.

Furthermore, all Global Journey Packages Brussels Airlines and Tomorrowland sell together will from now on be Green Fares, which compensate the flight emissions with Sustainable Aviation Fuel (20%) and thanks to the investment into qualitative CO2-reducing programmes (80%). To top it off, Tomorrowland and Brussels Airlines signed an agreement to invest in the purchase of SAF to compensate the total carbon emissions of all party flights that will be operated.

“Brussels Airlines has been a proud partner of Tomorrowland since 2012 and I am happy to announce that we will extend this partnership until 2028. We have many things in common such as the passion to explore the world and connecting cultures, but also the awareness of our environmental footprint and our willingness to take the necessary steps to reduce our impact. These shared values make this partnership such a success.”
– Dorothea von Boxberg, CEO, Brussels Airlines

First maiden flight
Amare will not only bring the festivalgoers to Tomorrowland but will be operating commercial flights as from 26 April 2024. It will leave on its “maiden voyage” on 26 April 2024 to Tenerife, at 1.20pm, flight number SN3781.

About the design of Amare
Amare is a Tomorrowland icon symbolizing bringing people together and is actually synonymous with Unity.
In the Tomorrowland Universe, the bird is the only one able to travel through different Tomorrowland worlds via Paperworld (the magical parallel spectrum that connects the different worlds).So from this line of thought, Amare was visualized as if the magical bird was traveling through the “spectrum of space” by having him fade out towards the back. This also conveys a stronger sense of motion and makes the aircraft even more dynamic and modern.
This also emphasizes the very iconic head of Amare that is now known by many. Furthermore, the new visualization also exudes a tremendous power in magic through energy lines and particles that are in the direction of motion, this to further emphasize that Amare is a magical being that is constantly in motion with the purpose of bringing people together.

About Brussels Airlines’ Belgian Icons
Brussels Airlines first Belgian Icon, Rackham, was introduced in 2015 and pays tribute to Tintin, the world-famous Belgian comic.Several other Belgian Icons followed to showcase the best of Belgium around the world:
- Magritte was part of the fleet between 2016 and 2021. The aircraft was a homage to René Magritte, the Belgian surrealistic painter.
- Also in 2016, Trident joined the fleet. The official plane of the Belgian Red Devils, the Belgian national soccer team. In 2021 a new Trident was presented, this time also proudly representing the Belgian Red Flames, the female soccer team.
- Together with long-esteemed partner Tomorrowland, Amare was introduced in 2017.
- Aerosmurf smurfed the fleet between 2018 and 2023.
- Flemish painter Pieter Bruegel the Elder, a Belgian icon from the 16th century, traveled the world between 2019 and 2023.The idea behind the Belgian Icons is to introduce the best of Belgium to the world. The Belgian Icons are known all over the world and make flying even more fun.

Brussels Airlines aircraft photo gallery:

Brussels Airlines reaches agreement with cockpit and cabin unions about reward package

Brussels Airlines is glad to announce an agreement has been reached with the cockpit unions about their reward package. The deal was signed on March 24. The details will be communicated to the cockpit community in the coming days. The agreement takes into account our current financial reality and focusses mainly to improve the gross salary.

During the covid-crisis, all employees at Brussels Airlines had to make sacrifices to save the company. Now that Brussels Airlines is back to profitability, a deal has been negotiated which will increase the purchasing power of the cockpit community, while taking into account its current financial reality. The focus of the deal is a reviewed gross salary grid in 2 steps, 1 step already this year and another step in 2026.

Two weeks ago, Brussels Airlines was able to reach an agreement with the cabin crew unions about their reward package. Brussels Airlines is confident that the social peace can return to the company, so the airline can live up to its promise to be the most reliable airline, making everyone feel at home. Brussels Airlines once again apologizes towards passengers who were impacted by industrial actions.

On March 7, Brussels Airlines was able to announce the first profitable full-year results since 2019, showing the airline has turned the page after the very difficult covid period. A substantial part of this profit is used to increase the salaries of the employees, but Brussels Airlines remains committed to make important investments for its future, with new, fuel-efficient planes, growth of the network and a state-of-the-art product for its passengers.

Brussels Airlines aircvraft photo gallery: