Lufthansa Projects Corp. Demand Acceleration Through 2024

Lufthansa Group business travel revenue at the end of 2022 reached about 70 percent of 2019 levels, and the business traveler passenger count reached about 60 percent, executives said Friday during the airline company's full-year 2022 earnings call.

The company projects business travel revenue and passenger recovery at the end of 2023 to reach about 80 percent and 70 percent of 2019 levels, CFO Remco Steenbergen said on the call.

Further recovery should be expected throughout 2024, Lufthansa Group CEO Carsten Spohr said, spurred by the opening to international travel of large Asian markets and what he called the growing corporate disenchantment with remote conferencing.

"We see it also in larger companies now more slowly than in the small and medium companies [that] this way of running a business doesn't work," Spohr said. "So, individuals will travel more."

Additionally, Spohr said, "two large markets with a high share of corporate travel were not really in full swing in '22, and not even the first part of '23, which is China and Japan. These markets coming back to even the same levels as other markets with the higher share of corporate travel will by statistics drive our corporate share."

A slide deck provided by Lufthansa included a chart that suggested the company's business travel passenger count would reach 80 percent of 2019 levels by the end of 2024, while the leisure passenger count would crack 100 percent recovered by that time.

Spohr also suggested that economic conditions were not a factor in business travel recovery, as "the predicted recession in our home markets has fortunately not materialized and global trade continues to be as important as ever."

Quarterly and Annual Results

Full-year revenue for the Lufthansa Group, which includes Lufthansa, Austrian, Swiss, Brussels and Eurowings airlines, reached €32.8 billion, up from €16.8 billion in 2021, a result Spohr called "extraordinary." 

Passenger airline revenue increased 148 percent year over year to nearly €22.8 billion, while total passenger count increased 117 percent to 101.8 million. Adjusted 2022 earnings before interest, taxes, depreciation and amortization increased to nearly €3.8 billion from €593 million the year prior.

Spohr noted his agreement with Lufthansa partner United Airlines CEO Scott Kirby's recent commentscalling 2023 industry capacity aspirations "unachievable." 

"Capacities will remain limited for many years ahead, while at the same time, demand continues to increase," Spohr said. "At 85 percent to 90 percent of capacity, we have deliberately planned our capacity more conservatively than many other airlines."

Spohr also reiterated Lufthansa's intention to divest corporate payment provider AirPlus International, once the company could "realize [its] full value." 

"The sooner, the better," he said. 

Spohr and Steenburgen spoke one day after the Lufthansa Group announced their contracts had been extended through 2028.

 Lufthansa Q3 results