Rising long-haul business demand boosts Lufthansa Group

European aviation giant Lufthansa Group has seen a “positive” trend for business travel for the first few months of 2024, particularly for long-haul flights to North America, India and Japan as it looks to add more capacity on these routes.

The group, which suffered a €350 million financial hit from a series of strikes by workers earlier this year, saw its total revenue increase by 5 per cent to €7.4 billion during the first quarter despite the impact of cancellations caused by the industrial disputes. Passengers number were also up by 12 per cent year-on-year to 24 million in Q1.

But the strikes still had a huge financial impact on Lufthansa’s Q1 results, which saw the company’s operating loss balloon to €849 million, compared to a loss of €273 million during the same period of 2023.

The core Lufthansa Airlines operation suffered particularly high losses of €640 million in the quarter due to the strikes. The company said the carrier would be looking to “reduce operating costs, stop new projects and assess the need for additional staff in administrative areas”.

Carsten Spohr, the company’s CEO, said: “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.

“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.”

Spohr added that the group, which also includes Austrian Airlines, Brussels Airlines, Eurowings and Swiss, was set to enjoy “another very strong summer” with current bookings up by 16 per cent on last year.

“I am particularly pleased that we are continuing to see a positive trend not only among leisure but also business travellers,” said Spohr. “We are now devoting all our energy to further expanding our premium customer offers and ensuring punctual and reliable flight operations.”

The group said that global demand for flights “remains strong”, including business travel where long-haul routes have performed particularly well.

“In addition to the traditionally strong North American routes, demand from business travellers on the India and Japan routes in particular is growing this year,” said Lufthansa in its update to investors.

The company also highlighted the launch of its new Lufthansa Allegris long-haul cabins, with the first flights featuring these upgraded services due to begin on Wednesday (1 May) on Airbus A350 flights between Munich and Vancouver.

Lufthansa said that capacity for the second quarter would be around 92 per cent of pre-Covid levels, but the year-on-year increase in Q2 will be lower than originally planned due to “further investments in operational stability and delayed aircraft deliveries”. Capacity in Q3 is expected to rise to 95 per cent of 2019 levels.

The company admitted that passengers had been “reluctant to make short-term bookings for April and, to a lesser extent, May during the wage disputes that have now been resolved”.