Core Viewpoint - Lufthansa has issued a profit warning for 2024 following a disappointing second quarter and has initiated a "turnaround" plan for its flagship carrier, which may struggle to break even this year [1][4]. Financial Performance - The group now anticipates an operating profit of €1.4-1.8 billion ($1.5-$1.9 billion) for the year, a reduction from the previous estimate of approximately €2.2 billion [2]. - The second-quarter operating profit was reported at €686 million, a decline of nearly 40% compared to the same period last year, although it slightly exceeded analysts' expectations of €646 million [3]. Challenges Faced - Lufthansa's flagship carrier experienced a significant profit drop due to adverse market conditions, inefficient flight operations, and delayed aircraft deliveries [4]. - The airline is encountering multiple challenges, including a substantial first-quarter loss attributed to staff strikes for higher wages amid rising inflation [6]. - The ongoing geopolitical tensions, particularly the Hamas-Israel conflict, have led to flight suspensions to and from certain destinations, further complicating operations [7]. Strategic Initiatives - To address the financial difficulties, Lufthansa is launching a comprehensive turnaround program, although specific details have not been disclosed [4]. - The company plans to introduce an environmental charge for fares in Europe to manage costs associated with increasing EU climate regulations, particularly regarding sustainable aviation fuel [8]. - Lufthansa is also looking to enhance its position through the acquisition of a stake in ITA Airways, which has received conditional approval from the EU [8]. Market Context - The broader aviation industry, including major competitor Airbus-KLM, is also facing challenges, with Airbus-KLM reporting a loss of €522 million in the first quarter due to rising costs and geopolitical tensions, despite an increase in passenger numbers and ticket prices [9].

Core Viewpoint - Lufthansa is implementing an environmental charge of up to 72 euros ($77) on fares in Europe to address the increasing costs associated with EU climate regulations [2][10]. Group 1: Regulatory Impact - The environmental charge will apply to all flights departing from EU countries, as well as Britain, Norway, and Switzerland, starting January next year [3][10]. - The EU legislation mandates airlines to gradually increase the use of sustainable aviation fuel (SAF) on routes departing EU airports, starting with a requirement of 2% SAF in 2024, increasing to 6% by 2030, and reaching 70% by 2050 [4][12]. - Lufthansa is facing additional costs from changes to the EU's emissions trading system and other regulatory measures [6][11]. Group 2: Financial Performance - After receiving a government bailout during the COVID-19 pandemic, Lufthansa reported strong profits in 2022 and 2023 due to a resurgence in travel demand [7]. - Despite the recovery, the company experienced a significant loss in the first quarter of the year due to a series of strikes [15]. Group 3: Industry Challenges - The aviation sector is particularly challenging to decarbonize, with SAF being a crucial component for meeting emissions targets, although it is currently more expensive to produce [5]. - Airlines for Europe, representing major airline groups including Lufthansa, has expressed concerns about the minimal production of SAF in Europe compared to initiatives in the United States [13]. Group 4: Environmental Goals - Lufthansa aims to halve its net carbon emissions by 2030 compared to 2019 levels and to achieve carbon neutrality by 2050 [14].

German airline firm Lufthansa Group said Tuesday that it would add an "environmental cost surcharge" to ticket prices as soon as this week, which could be as high as 72 euros ($77) for some flights. "The surcharge is intended to cover part of the steadily rising additional costs due to regulatory environmental requirements," Lufthansa said in a statement, pointing to regulations from the European Union and International Civil Aviation Organization. The additional cost will be applied to fights departing fro ...

Deutsche Lufthansa AG has a Zacks Rank of #2 (Buy), while Southwest Airlines has a Zacks Rank of #5 (Strong Sell) right now. Investors should feel comfortable knowing that DLAKY likely has seen a stronger improvement to its earnings outlook than LUV has recently. But this is just one piece of the puzzle for value investors. DLAKY currently has a forward P/E ratio of 4.81, while LUV has a forward P/E of 27.56. We also note that DLAKY has a PEG ratio of 1.58. This popular metric is similar to the widely-known ...

This article has been reviewed according to Science X's editorial process and policies . Editors have highlighted the following attributes while ensuring the content's credibility: Credit: CC0 Public Domain The US Department of Transportation said Monday that three airlines including German carrier Lufthansa have been made to pay over $900 million in passenger refunds due to pandemic-related flight cancellations or changes. The department is also looking into $2.5 million in civil penalties against the airl ...

Deutsche Lufthansa AG (OTCQX:DLAKF) Q1 2024 Earnings Conference Call April 30, 2024 5:30 AM ET Company Participants Dennis Weber - Head, Investor Relations Carsten Spohr - Chief Executive Officer Remco Steenbergen - Chief Financial Officer Conference Call Participants James Hollins - BNP Jaime Rowbotham - Deutsche Bank Alex Irving - Bernstein Stephen Furlong - Davy Ruxandra Haradau-Doser - HSBC Ruairi Cullinane - RBC Jarrod Castle - UBS Sathish Sivakumar - Citi Harry Gowers - JPMorgan Conor Dwyer - Morgan S ...

This article has been reviewed according to Science X's editorial process and policies . Editors have highlighted the following attributes while ensuring the content's credibility: Strikes have taken a deep bite into Lufthansa balance sheet but the airline still expects to end 2024 with an operating profit of 2.2 billion euros. German airline giant Lufthansa reported a hefty first-quarter loss Monday and downgraded its 2024 outlook due to recent strikes, while warning of risks from conflict in the Middle E ...

Airlines flying to the Middle East are beginning to make changes to their schedules after Iran launched over 300 drones and missiles at Israel in a brutal assault. Reuters reported that German airline Lufthansa was suspending scheduled flights to Tel Aviv, Amman and Erbil until Tuesday. The company also announced it would be suspending flights to Beirut and Tehran until at least Thursday, due to violence in the Middle East.Lufthansa, which is also linked to Swiss and Austrian airlines, said it was evaluatin ...

Deutsche Lufthansa AG (OTCQX:DLAKF) Q4 2023 Earnings Conference Call March 7, 2024 6:30 AM ET Company Participants Dennis Weber - Head of Investor Relations Carsten Spohr - Chief Executive Officer Remco Steenbergen - Chief Financial Officer Conference Call Participants Harry Gowers - JPMorgan Jaime Rowbotham - Deutsche Bank Tobias Fromme - Bernstein Stephen Furlong - Davy Research Muneeba Kayani - Bank of America James Hollins - BNB Paribas Ruairi Cullinane - RBC Capital Markets Sandra Hadiza - HSBC Neil Gl ...

Internal Full Year 2023 Results Carsten Spohr, CEO Remco Steenbergen, CFO Frankfurt, 7 March 2024 Internal Full Year 2023 Results Carsten Spohr, CEO Review 2023 Frankfurt, 7 March 2024 A record summer made 2023 the third most profitable year in the Group's history | --- | --- | --- | --- | |--------------------------|-----------|-------|----------------------------------------| | | | | | | EUR 35.4bn Revenues +15% | vs. 2022 | | EUR 2.7bn Adjusted EBIT +76% vs. 2022 | | Passengers | Adj. ROCE | | Regularity ...