Summer comes to the rescue of this much leaner airline, and CEO Carsten Spohr will be glad to get rid of the overhanging debt it accumulated.
German airline Lufthansa will generate positive cash flow this summer, while it should be possible to fully unwind a Covid-19 rescue package in a year’s time, CEO Carsten Spohr told Reuters on Tuesday.
Most Lufthansa flights were grounded by the coronavirus pandemic in early 2020, plunging the airline into crisis and leading the German government to acquire a 20 percent stake as part of a $7.1 billion rescue package.
Germany’s economic stabilisation fund said last week it would start selling down its stake in the coming weeks with a view to disposing of it fully by the end of 2023.
“We are relieved that the government has entered the process of exiting,” Spohr said in an interview, adding that he expected the rescue and stabilisation of the airline to be largely wrapped up next summer.
Cost savings mean Lufthansa can generate cash even with passenger numbers at half pre-pandemic levels — a level reached during the summer holiday season, said Spohr. For the year as a whole, Lufthansa can reach 40 percent of pre-crisis capacity.
Lufthansa’s cargo operation was performing strongly and is expected to generate profits of a $1.2 billion this year, he added. That compares with last year’s air cargo profit of $757 million.
(Writing by Douglas Busvine. Editing by Mark Potter)
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Photo credit: Lufthansa's cargo operation is performing strongly and expected to generate profits of $1.2 billion this year. TJDarmstadt / Wikimedia