German airline Lufthansa returns to profit after pandemic

After two years of massive losses brought about by the COVID-19 pandemic, German airline giant Lufthansa has reported an annual profit for 2022.

The company said on Friday that its net profit from last year reached €791 million ($839 million). Losses had amounted to €2.2 billion and €6.7 billion in 2021 and 2020 respectively.

The adjusted operating profit for 2022 was €1.5 billion.

"Lufthansa is back," said the company's CEO, Carsten Spohr.

"In just one year, we have achieved an unprecedented financial turnaround ... the Lufthansa Group has achieved a much better result than expected. Demand for air travel remains high in 2023."

Airline recovers from pandemic

Lufthansa is one of Europe's biggest airlines and owns subsidiaries Eurowings, Austrian, Swiss and Brussels airlines.

It required a bailout from the German government in 2020 as international air travel was brought to a halt by the outbreak of the coronavirus pandemic.

But the company said that the number of passengers in 2022 had more than doubled from the previous year — reaching 102 million — as pandemic restrictions eased.

However, the airline is still dealing with the fallout of letting go of a large chunk of its workforce as a response to the loss of demand.

This caused problems in the summer as it could not keep up with the rapid return of passengers, forcing it to cancel flights. Other airlines were similarly affected.

The company said that high demand in 2023 would be tempered by "the bottlenecks still expected in the European aviation system."

Worker issues not resolved

Lufthansa launched a campaign to hire 20,000 new employees in November, including pilots, flight attendants, technicians and IT specialists.

But it is also facing the threat of strikes as workers take action to demand wage increases to meet soaring inflation.

The company was forced to ground 1,300 flights at Frankfurt and Munich airports last month as workers went on strike.

Pilots, who also went on strike last year, have agreed to hold off on industrial action until the end of June in line with a pay deal, but could once again walk out during the peak holiday season.

Nevertheless, the company is looking to invest in Italy's troubled ITA Airways, proposing initially to purchase a minority stake but with the option to buy up the remaining shares.

It aims to develop Rome into a travel hub for direct flights to and from the US.

ab/nm (AFP, Reuters)

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