Labor strikes may push back Lufthansa’s profit growth goals
Deutsche Lufthansa AG said earnings won’t advance in 2024, and expects that Q1 losses will widen as the company grapples with disruptions from labor strikes and the cargo boom that took hold during the pandemic ebbs. Europe’s largest airline group estimates that the strikes in January and February cost it at least E100m, with hundreds of thousands of passenger journeys disrupted. While CFO Remco Steenbergen said the carrier will maintain its 8% operating margin target for 2024, the walkouts in Q1 could have an impact on full-year results. The German airline group has seen operations disrupted by waves of strikes, including a two-day walkout this week that disrupted journeys for almost half a million passengers, Lufthansa said. The renewed flare-up of labor disputes is reminiscent of lengthy battles that Lufthansa waged for years with groups like pilots before the pandemic, as employees once again demand a greater slice of profits derived from resurgent demand. Lufthansa reported adjusted earnings before interest and tax of E2.68b for last year, compared with E1.52b a year earlier, giving the company an operating margin of 7.6% — close to its target margin of 8%. The carrier group will pay a dividend of 30 cents a share, saying it wants to pay out 20%-40% of profit to shareholders. “The desire to travel is as strong as ever,” Carsten Spohr, Lufthansa’s CEO, said on Thursday during a press conference. “This desire that we feel is offset by various bottlenecks” which limit supply such as delayed aircraft, unscheduled engine maintenance and staff shortages. Lufthansa is still trying to complete the purchase of a stake in ITA Airways, the Italian successor to Alitalia, an endeavor that’s been held up by competition reviews in Brussels. The Italian airline would add to the group’s holding of national airlines, which include carriers in Austria, Switzerland and Belgium. The company said on Thursday that it’s still expecting approval of the deal “over the course of this year” and that it’s working closely with European Commission to conclude the transaction.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2024-03-08/star/labor-strikes-may-push-back-lufthansa2019s-profit-growth-goals
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Labor strikes may push back Lufthansa’s profit growth goals
Deutsche Lufthansa AG said earnings won’t advance in 2024, and expects that Q1 losses will widen as the company grapples with disruptions from labor strikes and the cargo boom that took hold during the pandemic ebbs. Europe’s largest airline group estimates that the strikes in January and February cost it at least E100m, with hundreds of thousands of passenger journeys disrupted. While CFO Remco Steenbergen said the carrier will maintain its 8% operating margin target for 2024, the walkouts in Q1 could have an impact on full-year results. The German airline group has seen operations disrupted by waves of strikes, including a two-day walkout this week that disrupted journeys for almost half a million passengers, Lufthansa said. The renewed flare-up of labor disputes is reminiscent of lengthy battles that Lufthansa waged for years with groups like pilots before the pandemic, as employees once again demand a greater slice of profits derived from resurgent demand. Lufthansa reported adjusted earnings before interest and tax of E2.68b for last year, compared with E1.52b a year earlier, giving the company an operating margin of 7.6% — close to its target margin of 8%. The carrier group will pay a dividend of 30 cents a share, saying it wants to pay out 20%-40% of profit to shareholders. “The desire to travel is as strong as ever,” Carsten Spohr, Lufthansa’s CEO, said on Thursday during a press conference. “This desire that we feel is offset by various bottlenecks” which limit supply such as delayed aircraft, unscheduled engine maintenance and staff shortages. Lufthansa is still trying to complete the purchase of a stake in ITA Airways, the Italian successor to Alitalia, an endeavor that’s been held up by competition reviews in Brussels. The Italian airline would add to the group’s holding of national airlines, which include carriers in Austria, Switzerland and Belgium. The company said on Thursday that it’s still expecting approval of the deal “over the course of this year” and that it’s working closely with European Commission to conclude the transaction.<br/>
