German airline giant Lufthansa more than doubled its profit in 2023 as it continues to recover from the coronavirus pandemic, although it faces fresh risks from a wave of strike action.
The group reported a net profit of 1.67 billion euros, a significant increase from the figure of 791 million euros in 2022. The profit was slightly below the estimate of analysts polled by financial data firm FactSet.
But the company still marks a second straight year of success for the group - whose carriers include Lufthansa, Eurowings, Austrian, Swiss, and Brussels Airlines - after two years of losses due to the pandemic-related border closures.
"The Lufthansa Group has regained its financial strength," said CEO Carsten Spohr.
2023 was "one of the three best years in the history of the Lufthansa Group," he added.
Revenues increased by 15% to over 35 billion euros, and a total of 123 million passengers flew with the group's airlines, which is 20% more than the previous year, although still below the record levels before the pandemic.
The group said it wanted to pay shareholders a dividend for the first time since 2019, before the coronavirus pandemic.
Like other airline groups, Lufthansa was hit hard when the coronavirus brought global air travel to a halt and in 2020 had to be bailed out by the German government. But the company - one of Europe's biggest airline groups - has bounced back very successfully as demand rebounded when restrictions were lifted.
In its forecast for this year, the group said it expects sales to increase significantly and operating profit to be at the same level as in 2023.
Numerous challenges
Lufthansa still faces a host of challenges, the most pressing of which is a wave of strikes as unions demand steep wage increases to offset high inflation.
The latest of these began early today when Lufthansa ground staff began a two-day strike that will cause major disruption. Flights from and to Frankfurt and Munich by airline and from Sofia airport have been canceled.
Employees also went on strike in February, affecting around 100,000 passengers and grounding 80-90% of the airline's commercial flights.
Earlier this week, Marvin Resinski of the Verdi union, which represents the workers, lashed out at Lufthansa for refusing to comply with their demands while posting big profits.
While the company reported good results and "bonuses for board members will be increased significantly... employees, on hourly wages of €13 in some cases, no longer even know how to make ends meet in Germany's most expensive cities." he noted to AFP.
Recently, many sectors in Germany have been affected by protests - from transport to public administration.
The airline has also faced hiring problems as it races to replace employees who have been laid off or left during the pandemic.
Lufthansa's bid to acquire a stake in Italy's ITA Airways has faced turmoil after the European Union's antitrust watchdog launched an investigation into the plan, fearing it could harm competition.
Last year, Lufthansa agreed to pay 325 million euros for a 41 percent stake in ITA, with the Italian finance ministry also contributing 250 million euros as part of the capital increase.
The deal provided the German company with various options to increase its stake or acquire ITA Airways entirely at a later stage.
The company today spoke upbeat about the deal, saying it "expects EU Commission approval this year".
The group is "working in close and constructive cooperation with the EU Commission to achieve the swift closing and subsequent implementation of the transaction," the statement said. /BGNES
