The Lufthansa Group increased its total revenues by 12.7 per cent to $20 billion in the first six months of 2017. Traffic revenues were up by 14.2 per cent to $15.6 billion. And the key earnings indicator Adjusted EBIT was roughly doubled to over $1.18 billion, giving the Lufthansa Group its best-ever first half year earnings result.
The earnings performance is attributable primarily to strong demand and lower unit costs at the group’s passenger airlines. Unit costs excluding fuel and currency effect declined by 1.2 per cent in the first half-period. All the group’s first half-year performance figures and fuel costs include the impact of the first-time consolidation of Brussels Airlines and of the aircraft wet-leased from Air Berlin.
“We have achieved the best first half-year result in our company’s history,” says Ulrik Svensson, chief financial officer of Deutsche Lufthansa AG. “In addition to strong demand and a robust pricing environment, this is attributable to the fact that we achieved a further structural reduction in costs. Our hard work in cutting our costs is reaping its rewards. But we must continue these endeavours: this is the most important way that our margins can be improved sustainably.”
“Our key financial performance indicators have been significantly improved further,” Ulrik Svensson confirms. “Our free cash flow has almost doubled, and our net financial debt has been more than halved. Higher revenues and lower costs have enabled us to soundly finance the investments required for new aircraft and an attractive product. All of which is vitally important in keeping our company the number one in Europe.”
SWISS more than offset a decline in yields with a substantial increase in sales, and raised its Adjusted EBIT for the period to $219 million. Both Eurowings and Brussels Airlines posted a positive result for the second-quarter period.
“All our airlines were able to improve their load factors despite raising their capacities,” Svensson adds. “This shows that our products are well received by our customers. As a result, our Network Airlines in particular made a substantial contribution to our improved overall earnings. We are also very satisfied with the developments at Eurowings, which now has every prospect of breaking even this year – earlier than anticipated.” The airline has raised its forecast for 2017, the organic capacity growth in the second half-year is expected to be 4.7 per cent.
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