Deutsche Lufthansa AG
is working to expand capacity after swinging to a profit in the fourth quarter and the whole of 2022 as it expects demand for air travel will remain strong after years of restrictions and border closures that crippled the industry.
The German carrier group on Friday posted a net profit of 791 million euros ($838.2 million) for the year and EUR307 million for the fourth quarter. The company was in the red in 2021, with an annual loss of EUR2.19 billion and a EUR314 million loss in the fourth quarter.
Travel restrictions and border closures brought international traffic to a near standstill at the height of the Covid-19 pandemic. Now, airlines are scrambling for planes to expand capacity to meet surging demand for international air travel.
Lufthansa on Thursday said it had ordered 22 long-haul aircraft from Airbus SE and Boeing Co. worth about $7.5 billion at list price that should be delivered starting in the middle of the decade.
So far, the airline placed orders for 10 Airbus A350-1000s, five Airbus A350-900s and seven Boeing 787-9s, though it said it is in advanced talks to acquire more long-haul aircraft. Lufthansa is also planning to reactivate four A380s, the world’s biggest passenger plane, on routes to the U.S. starting in July.
The carrier is due to receive a total of 108 long-haul aircraft over the next few years as it is retiring six older aircraft types, including the Boeing 747-400, the Airbus A340-600 and the A340-300.
Lufthansa served 102 million passengers last year, more than twice as many as in 2021.
Fourth-quarter revenue climbed 52% to EUR8.88 billion. Adjusted earnings before interest and taxes–Lufthansa’s preferred measure of profitability–came in at EUR575 million from an adjusted loss of EUR42 million. The group expects a significant improvement in adjusted EBIT this year.
Analysts had forecast a net profit of EUR875 million for the year and EUR386 million for the fourth quarter on revenue of EUR9.21 billion and adjusted earnings of EUR605 million, according to a company-provided consensus.
Lufthansa said air-travel demand for the upcoming Easter and summer vacation periods is particularly robust, with Spain, Italy, Greece, and other Mediterranean countries proving to be the most popular destinations while demand for flights to and from North America is also high.
The airline expects capacity to increase to roughly 85% to 90% on average this year compared with 2019, though it anticipates bottlenecks in the European aviation system.
Write to Mauro Orru at email@example.com; @MauroOrru94