Network Airlines and Lufthansa Cargo see significant margin improvements while overall Lufthansa achieves its best first-quarter margin in ten years.
The Lufthansa Group continues its successful path in the first quarter of 2018, and has started well into the new year. The Group’s Network Airlines increased their Adjusted EBIT margin significantly by 3.2 percentage points to 2.4 per cent in what is traditionally the weakest quarter for all airlines.
Lufthansa Cargo achieved an even stronger Adjusted EBIT margin improvement: up 4.3 percentage points to 10.1 per cent. These improved earnings were largely offset, however, by significant one-off costs at Eurowings from its growth in the context of the Air Berlin insolvency.
Fuel costs for the first three months of 2018 virtually remained on prior-year level at EUR 1.2 billion (up 0.9 per cent) since volume growth and higher average prices were compensated by currency effects and successful hedging.
“We remain well on track, and have achieved another good set of results for the first quarter 2018,” says Ulrik Svensson, Chief Financial Officer of Deutsche Lufthansa AG. “Despite incurring high one-off expenses at Eurowings, we again managed to steadily further reduce our unit costs while simultaneously investing in the quality of our product.”
Compared to its guidance of 15 March, the Lufthansa Group now expects an organic capacity growth of some 6 per cent for 2018.