The crisis continues to have a significant impact on the development of the Lufthansa Group’s results in the third quarter of 2020. Due to an expansion of the flight schedule in the summer months in the northern hemisphere from July to August and significant cost reductions, losses were reduced compared to the same period in the previous year.
In yesterday’s earnings release, the group reported an EBIT (earnings before interest and taxes) of -1.26 billion euros in the third quarter (in the previous year the company achieved a profit of 1.3 billion euros). After nine months of the year the operating loss was -4.2 billion euros (in the previous year a profit of 1.7 billion euros was achieved). At the end of September, the group had liquidity of 10.1 billion euros. This figure includes unused funds from the € 9 billion stabilization packages from Germany, Switzerland, Austria and Belgium. Of this, 6.3 billion euros are still available.
According to its own information, the Lufthansa Group is also able to withstand other effects of the pandemic and predicts that the demand for flight tickets in the coming winter months should remain low due to the travel restrictions associated with Covid.
According to current planning, the Group’s airlines will only offer a maximum of 25% of last year’s capacity in the fourth quarter to ensure that flight operations continue to generate a positive cash contribution. At the same time, the group announces that it is working intensively on restructuring measures in all business areas in order to achieve cost savings in the short and medium term and to minimize the outflow of operating cash.
Recently, the company also announced drastic changes to its fleet composition, as we discussed in the following article: