Financial Data and Key Metrics Changes - The company achieved a revenue of €10.7 billion in Q3 2024, marking a 5% increase compared to the previous year, making it the strongest quarterly revenue in the company's history [14][39] - Adjusted EBIT for Q3 was €1.3 billion, reflecting a decrease of approximately 9% year-on-year [40] - Adjusted free cash flow was positive at €128 million, significantly lower than the previous year due to lower operating results and higher tax payments [59] Business Line Data and Key Metrics Changes - All passenger airlines within the group reported positive results, with Austrian, Brussels, and Eurowings achieving record results [18] - Lufthansa Airlines, however, faced challenges, posting an adjusted EBIT of approximately €400 million, a decrease of over 36% compared to the previous year [45][46] - Lufthansa Cargo profits increased significantly, driven by strong demand from Asia Pacific, with freight yields remaining over 40% above pre-crisis levels [53][54] Market Data and Key Metrics Changes - Capacity offered in the passenger airlines segment reached around 94% of pre-crisis levels, a 6 percentage point increase compared to the prior year [41] - Yields overall declined by 3.5%, with Asia Pacific yields down almost 14% due to strong competition from Chinese carriers [42][43] - The company observed a solid demand environment, with bookings for November up by 70% and December by 55% [81] Company Strategy and Development Direction - The company aims to strengthen its position as Europe's number one airline while addressing regulatory challenges [13] - A comprehensive turnaround program has been initiated for Lufthansa Airlines, targeting efficiency improvements and cost reductions, with an expected positive EBIT effect of up to €1.5 billion by 2026 [48][49] - The company is focused on fleet modernization, with 250 new aircraft on order, which will significantly reduce fuel consumption and CO2 emissions [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the stable market outlook for the aviation industry, despite operational challenges and external factors affecting Lufthansa Airlines [9][12] - The company expects to achieve an adjusted EBIT guidance range of €1.4 billion to €1.8 billion for the full year 2024, with adjusted free cash flow expected to be significantly below €1 billion [67] - The management emphasized the importance of operational stability and customer satisfaction as key to future growth [33] Other Important Information - The company has recruited over 5,600 new employees in the last 18 months to stabilize operations post-COVID [24] - The Digital Hangar initiative has led to significant improvements in customer experience, with the airline app being named the best airline app in the world [27][29] - The company is optimistic about completing the acquisition of ITA, which will enhance its market presence in southern Europe [71] Q&A Session Summary Question: Demand environment for winter months - Management noted solid demand driven by leisure and premium classes, with Eurowings performing strongly [81] Question: Clarification on turnaround program figures - The €1.5 billion is a gross measure for 2026, with expectations for a ramp-up in 2025 [85] Question: Capacity outlook for Lufthansa Airlines - Lufthansa Airlines is expected to operate at 84% of pre-crisis capacity, with slower growth due to profitability concerns [86] Question: Cost pressures from suppliers - Frankfurt Airport has increased charges significantly, leading to slower growth at that hub [92] Question: Airfreight and tariff impacts - The company is shifting freighter capacity towards Asia, particularly China, due to strong e-commerce demand [96]
Lufthansa(DLAKY) - 2024 Q3 - Earnings Call Transcript