Lufthansa becomes latest airline to tap higher ticket prices and profits amid summer chaos

The airline also provided a clearer outlook for full-year profit, predicting adjusted earnings before interest and taxes of more than €500m, which compares with the €585m estimate of analysts

Lufthansa now said it expects a “significant increase” in earnings in the third quarter compared to the second. File photo

Lufthansa has forecast its profits will keep rising in the coming months, the latest airline to tap the benefits of surging demand that has allowed it to increase ticket prices as airports insist that carriers cancel flights to cope with the summer chaos. 

Last week, both Air France-KLM and IAG, the conglomerate that owns Aer Lingus, British Airways, and other airlines, in a perverse boost, tapped higher fares amid major cancellations forced on them by major European airport hubs. 

Lufthansa now said it expects a “significant increase” in earnings in the third quarter compared to the second. That’s after high ticket prices and bumper profits at the company’s cargo division more than offset increases in fuel costs in the second quarter. The shares ended 6% higher on Thursday. 

Lufthansa also provided a clearer outlook for full-year profit, predicting adjusted earnings before interest and taxes of more than €500m, which compares with the €585m estimate of analysts. The airline previously only said that it expected an improvement in 2022 compared with last year.

Heathrow and Schiphol have been among the European airports caught out by resurgent demand to have insisted on putting a cap on flights into their airports. Heathrow has talked of extending its cap into the autumn, but it is unclear how this will affect Aer Lingus and other airlines into and out of Heathrow, if at all. 

Such capacity caps have already led to cancellations and lifted fares in a business where demand was already close to matching supply. 

While travelers across Europe are grappling with disrupted flights, Europe's airlines are making money again. Having reduced its workforce during the pandemic, Lufthansa said it will hire some 10,000 new employees over the next 18 months. 

Irish Examiner and Bloomberg