Lufthansa Sees Stable Profits and Improved Punctuality Amid Fleet Delays

Lufthansa reported steady profits for the summer period, despite achieving record revenues and facing ongoing challenges from high costs and shifting market conditions. The airline noted a significant enhancement in its operational reliability, with punctuality rates reaching their highest levels in a decade. Nevertheless, future growth is expected to be tempered by delays in the delivery of new, more efficient aircraft.

Financial Performance Remains Steady

In the most recent quarter, Lufthansa generated revenues of 11.2 billion euros, marking a new high for the group. Despite this, the operating profit (adjusted EBIT) saw a slight decline of 1% year-over-year, amounting to just over 1.3 billion euros. This decrease was attributed primarily to lower average ticket prices and increased operational costs, particularly in fuel and personnel. After accounting for a negative tax effect, net profit stood at 966 million euros, representing a 12% reduction from the previous year.

The North American market, an important segment for the airline, experienced reduced demand from US travelers, partially due to a weaker US dollar during the period. Despite these challenges, Lufthansa remains on track to surpass last year's operating profit of 1.6 billion euros, with the year-to-date figure already showing an increase of approximately 300 million euros compared to 2024.

Operational Stability and Cost Reductions

Lufthansa highlighted improved operational stability during the summer, with 99% of scheduled flights arriving reliably. This improvement led to a substantial decrease in compensation payouts related to delays and cancellations. In the third quarter, compensation costs dropped to around 139 million euros, over 100 million euros less than the previous year. Increased booking activity and a more stable flight schedule have contributed to the airline's positive outlook for the remainder of the year.

Fleet Expansion Faces Setbacks

The airline's plans for fleet modernization continue to face hurdles due to delayed aircraft deliveries from major manufacturers. The delivery of the Boeing 777X wide-body aircraft, which was initially planned for earlier years, has now been postponed until 2027. This development adds to previous delays, and the company no longer expects the new model to be operational before the summer of that year.

Delays with the Airbus A350-1000 have further complicated Lufthansa's ability to retire older aircraft. As a result, the company will continue to operate older models, such as the Airbus A340-600, into the next summer season. Additionally, the double-decker Airbus A380, which had been phased out, is now expected to remain part of the fleet well into the next decade, ensuring capacity for long-haul routes.

Labour Relations and Potential Disruptions

Labour relations continue to pose a risk to operational stability. The airline's management has cautioned the pilots' union against industrial action, indicating that such disruptions would further increase personnel costs and negatively impact the company's competitiveness. While discussions are ongoing, the company has expressed willingness to consider the growth aspirations of its pilots, provided that existing cost disadvantages are addressed. Any strike-related disruptions would be factored into the respective airline's personnel expenses, potentially reducing future growth opportunities for the workforce.

Outlook

Lufthansa looks forward to maintaining its improved operational performance, despite the uncertainties related to fleet upgrades and labour negotiations. The airline expects continued stable earnings through the remainder of the year and is planning for the integration of new aircraft from 2027 onwards. Until then, the company will rely on a combination of existing and older aircraft to meet passenger demand and sustain network connectivity.