The cost of the mobilizations in January and February is estimated at at least 100 million euros
A burden for Deutsche Lufthansa is the strikes of its workers, which come to be added to the decrease in profits from logistics. Europe's largest airline group estimates that strikes in January and February cost at least 100 million euros, as hundreds of thousands of flights were cancelled. Although CFO Remko Steenbergen said the carrier would maintain its target of an 8% operating margin in 2024, strikes in the first quarter could have an impact on full-year results.
The German airline group's operations have been disrupted by waves of strikes, the most recent of which took place over two days this week, causing the cancellation of trips for around half a million passengers, Lufthansa said. The resurgence of labor disputes is reminiscent of Lufthansa's long-running battles with groups such as pilots before the pandemic, as workers again demand a bigger share of the profits coming from a resurgence in demand.
Lufthansa reported adjusted earnings before interest and taxes of 2.68 billion euros ($2.92 billion) for the past year, up from 1.52 billion euros a year earlier, giving the company an operating profit margin of 7.6 % – close to the target margin of 8%. The airline group will pay a dividend of 30 cents per share.
“The desire to travel is stronger than ever,” Lufthansa CEO Carsten Spohr said during a press conference on Thursday. “That desire we feel is offset by various bottlenecks” that limit supply, such as delayed aircraft, unscheduled engine maintenance and staff shortages. The German carrier is the last of the three main European airline groups to announce results for 2023. Last week Air France-KLM and IAG SA, the parent of British Airways, announced their results. Both warned that capacity growth could slow this year as geopolitical tensions deter passengers and corporate travel remains below pre-pandemic levels. Air France-KLM forecast capacity growth for this year of around 5%, while IAG is aiming for 7%.
