Deutsche Lufthansa AG LHA,
is working to expand capacity after turning profits in the fourth quarter and all of 2022 as it expects demand for air travel to remain strong after years of restrictions and border closures that crippled the industry.
The German carrier group posted a net profit of 791 million euros ($838.2 million) for the year on Friday and 307 million euros for the fourth quarter. The company was in the red in 2021, with an annual loss of 2.19 billion euros and a loss of 314 million euros in the fourth quarter.
Travel restrictions and border closures brought international traffic to a near halt at the height of the Covid-19 pandemic. Now airlines are scrambling for planes to expand capacity to meet the rising demand for international air travel.
Lufthansa said Thursday it had ordered 22 long-haul jets from Airbus SE and Boeing Co. worth about $7.5 billion at list price, which should be delivered from the middle of the decade.
So far, the airline has 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 purchase more long-haul aircraft. Lufthansa also plans to return four A380s, the world’s largest passenger jet, to service on routes to the US starting in July.
The airline will receive a total of 108 long-haul aircraft in the coming years as it retires 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.
Sales in the fourth quarter increased by 52% to EUR 8.88 billion. Adjusted profit before interest and tax – Lufthansa’s favorite measure of profitability – came to 575 million euros after an adjusted loss of 42 million euros. The group expects a significant improvement in adjusted EBIT this year.
Analysts had forecast net profit of 875 million euros for the year and 386 million euros for the fourth quarter on sales of 9.21 billion euros and adjusted profit of 605 million euros, according to a consensus provided by the company.
Lufthansa said demand for air travel for the upcoming Easter and summer holiday 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 this year to an average of 85% to 90% compared to 2019, but anticipates bottlenecks in the European aviation system.
Write to Mauro Orru at [email protected]; @MauroOrru94