Lufthansa warns of worsening outlook after modest summer surge in demand for flights

Lufthansa warned of a worsening outlook on Tuesday, despite delivering better than expected results, in part due to a modest surge in demand for flights over the summer. The airline’s shares rose 5% to E8.41 in Frankfurt as it recorded losses of almost E1.3b in the three months to the end of September. But the Frankfurt-based carrier said that for the next few months, it would offer only a quarter of the flights compared with the same period last year, due to the resurgence of coronavirus in many countries. The group, which received a E9b bailout from Angela Merkel’s government in June, had previously said it was expecting to offer 50% of its pre-crisis capacity over the winter, allowing it to break even. Aircraft passenger numbers have slumped since the beginning of the year as pandemic curbs have grounded flights around the globe. This year, Lufthansa, which includes brands such as Austrian, Brussels, Swiss and Eurowings airlines, has made an operating loss of more than E4b, compared with E1.7b in profits in the first nine months of 2019. The lower than expected Q3 losses were in part due to holidaymakers making the most of eased lockdowns, according to preliminary estimates released by the company on Tuesday. “Payments of E2b for corona-related flight cancellations were partly offset in the third quarter by cash inflows from the expansion of flight activities in July and August,” the company said. “The group also benefited from strict working capital management and the postponement of tax payments.” Helped by bailouts from Germany and Switzerland, Lufthansa said it had roughly E10b in liquidity, and was “also in a position to withstand further burdens from the coronavirus pandemic”. <br/>