Financial Data and Key Metrics Changes - The company reported a revenue increase of 6% to €37.6 billion, marking a new record [13] - Adjusted EBIT for the full year amounted to slightly more than €1.6 billion, a decline of around 40% compared to the prior year [26] - Net income for the full year was €1.4 billion, with a proposed dividend payment of €0.30 per share, resulting in a payout ratio of 26% [28] Business Line Data and Key Metrics Changes - Lufthansa Airlines experienced a loss of €94 million, significantly impacting the overall group's performance [15] - SWISS exceeded the adjusted EBIT mark of €800 million for the second time, while Eurowings achieved an adjusted EBIT of above €200 million [14] - Lufthansa Technik reported an adjusted EBIT of €635 million, slightly above the previous year's level [46] Market Data and Key Metrics Changes - The global aviation industry is expected to surpass $1 trillion in revenues for the first time, with over 5 billion passengers projected to travel by air [12] - The company expanded its capacity by 8.5% in 2024, although this was significantly lower than the 16% growth in 2023 [29] - The load factor remained stable, with peak values reaching above 90% during the record-breaking summer [13] Company Strategy and Development Direction - The company aims for further internationalization, highlighted by the acquisition of a 41% stake in ITA Airways, marking a significant milestone [7] - A turnaround program has been initiated to address the challenges faced by Lufthansa Airlines, focusing on operational stability and efficiency improvements [11][35] - The company plans to shift capacity growth to more efficient airlines and enhance operational efficiency through various measures [39][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a turnaround in the second half of 2024, with significant improvements in operational stability and customer satisfaction [9][10] - The company anticipates a moderate capacity growth of around 4% in 2025, supporting revenue growth and stabilizing operations [55] - Despite facing cost headwinds, management expects significant improvement in adjusted EBIT for 2025 compared to 2024 [56] Other Important Information - Irregularity costs increased substantially, amounting to over €840 million, driven by strikes and operational instability [26] - The company has hedged 79% of its fuel needs for 2025, which is expected to mitigate potential price escalations [54] - The company is committed to maintaining a full investment-grade rating and has issued a hybrid bond to strengthen its rating profile [52] Q&A Session Summary Question: Can you provide clarity on capacity and profitability expectations for 2025? - Management expects double-digit growth compared to 2024, with moderate capacity growth of around 4% [76][78] Question: What is the status of the ITA integration and potential acquisition of the remaining stake? - The company can call the remaining 49% stake as early as summer 2025, but no decision has been made yet [80] Question: What is the current status of the feeder contract with Condor and NPS trends? - The agreement with Condor was canceled, and the NPS has improved by 10 points over the winter [86][88] Question: How are discussions with crew regarding productivity progressing? - Talks are ongoing, but unions are insisting on restrictions that the company is not willing to accept [114][118] Question: What is the outlook for cargo profitability given potential market changes? - Management remains optimistic about cargo profitability, citing strong demand and the unpredictability of global supply chains [120][123]
Lufthansa(DLAKY) - 2024 Q4 - Earnings Call Transcript