Lufthansa Group has achieved adjusted EBIT of €2 billion in the financial year 2019, in line with the forecast despite considerable charges. The main drivers for the decline were a €600 million increase in fuel costs and a noticeable economic slowdown, especially in the Group’s home markets.
Earnings development was also impacted by high price pressure in the European market due to overcapacity and the weakening of the global airfreight market.
Lufthansa Group revenue in 2019 rose by 2.5% to €36.4 billion (previous year: €35.5 billion). The adjusted EBIT margin was 5.6% (previous year: 8.0%). Consolidated net profit fell by 44% to €1.2 billion (previous year: € 2.2 billion).
Unit revenues of the passenger airlines in the Group fell by 2.5% in 2019, adjusted for exchange rate effects, in particular due to the overcapacity in the Lufthansa Group’s home markets. At the same time, unit costs adjusted for fuel and currency effects were reduced by 1.5% in 2019, the fourth year in succession.
In order to secure its strong financial position, the Lufthansa Group has raised additional funds of around €600 million in recent weeks. In actuarial terms, the Group thus has liquidity of around €4.3 billion. In addition, there are unused credit lines of around €800 million. Further funds are currently being raised. Among other things, the Lufthansa Group will use aircraft financing for this purpose.
“The Lufthansa Group is financially well equipped to cope with an extraordinary crisis situation such as the current one. We own 86% of the Group’s fleet, which is largely unencumbered and has a book value of around €10 billion. In addition, we have decided to propose to the Annual General Meeting that the dividend payment be suspended, and we are proposing short-time working in our home markets,” said Ulrik Svensson, Chief Financial Officer of Deutsche Lufthansa AG. (€1.00 = US$1.07 at time of publication.)
