Lufthansa Sheds Losses & Sees First Positive Cash Flows Since Pandemic Start
Germany's Lufthansa Group (also the owner of Eurowings, Swiss, Brussels, and Austrian Airlines) said on Thursday it decreased losses in Q2 and recorded its first positive cash flow since the start of the COVID-19 pandemic, thanks to successful and quick cost cuts.
Lufthansa had announced that it was on track to return to profitability with fewer planes (20% smaller fleet) and staff (1.8 billion euro staff coat reduction) than it had before the travel industry took the pandemic hit, earlier in June. The airline group said it continued to expect high demand for tourist destinations and recovery in business travel in the second half of the year.
Indeed, results demonstrate that the group’s airlines carried 7 million passengers in the quarter ending June 30 - 18% of the pre-crisis levels in 2019, but as planned - gradually improved over the quarter to reach 40% at the end of June. Lufthansa also confirmed its target to reach a 40% capacity level for the entire year 2021, with the operating loss significantly below last year's nearly 5.5 billion euros.
All in all, Lufthansa’s adjusted operating loss narrowed to 952 million euros - down 43% from a year earlier and lower than the 971 million euros expected. Revenue totaled 3.2 billion euros against a 3.3 billion euro forecast. Adjusted cash inflow of 340 million euros in Q2 after a 1.13 billion outflow a year earlier was also seen.
"We have been able to stop the outflow of funds in the current phase of reviving our business and generate a positive cash flow for the first time since the beginning of the pandemic”, Chief Executive - Carsten Spohr commented.
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