Lufthansa cuts 2024 outlook due to strikes, capacity issues

COLOGNE, Germany: This week, German flag carrier Lufthansa downgraded its 2024 earnings outlook due to a series of strikes and a slow capacity increase.

In a statement, the airline said that this year, it expects adjusted earnings before interest and taxes (EBIT) of 2.2 billion euros (US$2.3 billion) compared with a previous forecast of 2.68 billion euros in 2023.

The airline added that its adjusted free cash flow is predicted to be at least 1 billion euros in 2024, compared with a previous forecast of some 1.5 billion euros. It reported a first-quarter loss of 849 million euros, compared to a 273 million euros loss in 2023.

"The loss was higher than expected due to various strikes ... which impacted earnings by around 350 million euros," Lufthansa said, noting that it agreed in recent weeks to increase the wages of both its flight attendants and ground staff to end a series of labor disputes that forced flight cancellations.

The company has also been hit by separate industrial action by German airport security staff.

Along with other airlines, Lufthansa has canceled flights to and from the Middle East amid tensions between Iran and Israel.

It expects its operating result in the second quarter to be lower than the previous year, it stated, reporting an additional negative impact of 100 million euros during that period.

The airline posted an adjusted EBIT of 1.09 billion euros in the second quarter of 2023.

"The second-quarter impact was because of effects that now-settled wage disputes, particularly at Lufthansa Airlines, had on short-term demand for travel bookings, as well as ongoing conflicts at Austrian Airlines," Lufthansa said.

"In addition, the ramp-up of capacity in the second quarter is forecasted to be slightly lower than originally planned to support improvements in punctuality for the customers and because of delays in new aircraft deliveries," it added.

Its results will be published for the first quarter on 30th April.