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Germany’s Lufthansa records first net profit since the start of pandemic

Lufthansa said Thursday its freight operations propelled the German airline group to its first net profit since the start of the coronavirus pandemic - despite the airline being plagued by chaos due to staff shortages and pay disputes.

An empty Lufthansa counter in Munich during a strike by ground staff on July 27th.
An empty Lufthansa counter in Munich during a strike by ground staff on July 27th. Photo: picture alliance/dpa | Peter Kneffel

Between April and June, Lufthansa recorded a net profit of €259 million ($263 million), over one billion euros more than the same period last year and its first positive quarter since the end of 2019.

Lufthansa was “back in the black”, CEO Carsten Spohr said in a statement, describing the pandemic as “the most severe financial crisis in our history”.

The group – which includes Eurowings, Austrian, Swiss and Brussels Airlines – made huge net losses of €6.7 billion in 2020 and €2.2 billion in 2021 as the pandemic shut down large parts of the airline industry.

Lufthansa was saved from bankruptcy by a government bailout in June 2020.

The improved figures were lifted by a “record” result for Lufthansa Cargo, which has benefitted from high demand and “ongoing disruptions in ocean freight”.

The freight division booked an operating – or underlying – profit of €482 million in the second quarter, a 48-percent improvement on last year.

A “boom” in demand for travel saw the result for Lufthansa’s passenger airlines “improved significantly” though they remained in the red, with the exception of Swiss.

Amid recent chaos at airports, Lufthansa said it would start recruiting again, bringing 5,000 new employees on board.

It comes after the airline slashed over 30,000 jobs since the start of the pandemic, out of 140,000 positions globally.

READ ALSO: Lufthansa pays back German bailout early – but job cuts still stand

A shortage of workers has left airports and airlines struggling to process high numbers of passengers, after they cut back their operations during the pandemic.

Lufthansa is also caught in disputes over pay and conditions. Ground staff carried out a strike on July 27th, while there are also threats of strikes from the Vereinigung Cockpit union, which represents German pilots. 

READ ALSO: Why is flying in Germany so expensive and chaotic right now?

During the ground crew strike, Verdi union said staff needed more money because they were essentially burnt out after “two years of the pandemic and massive job cuts”, as well rising inflation. 

Despite the disruption and the clouded outlook for the economy, Lufthansa said it “expects demand for tickets to remain high for the remaining months of the year”.

For the whole of 2022 Lufthansa planned to offer 75 percent of its pre-crisis capacity on passenger airlines.

The group also put a number on an expected operating profit for the year, saying it anticipated a result “above 500 million euros”.

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TRAVEL NEWS

No Easter strikes: Germany’s Lufthansa and ground staff reach pay deal

German airline giant Lufthansa and a union representing ground staff said Wednesday they had reached an agreement on pay after a lengthy dispute, averting the threat of Easter holiday strikes.

No Easter strikes: Germany's Lufthansa and ground staff reach pay deal

The deal between the carrier and the powerful Verdi union came after ground staff staged walkouts in recent months, leading to widespread disruption for air travellers.

After a series of direct pay talks failed, Lufthansa and Verdi entered arbitration this week, leading to Wednesday’s breakthrough.

Details of the deal were not immediately released.

But Lufthansa personnel chief Michael Niggemann said it was a “good compromise with substantial salary increases over the term of the agreement”.

Verdi had been seeking pay rises of 12.5 percent for the roughly 25,000 Lufthansa ground staff that it represents.

The ground staff staged their latest strike in early March, with a two-day walkout that led to the cancellation of up to 90 percent of Lufthansa’s flights. They also walked out in February.

Lufthansa cabin crew, who went on strike at major airports earlier this month, have still not reached a pay deal with the carrier.

But news outlet Spiegel reported that the airline group and the UFO union, which represents cabin crew, are due to enter arbitration after the Easter break.

The airline group earlier this month warned of the damaging impact of the wave of recent strikes, saying they would contribute to heavier losses in the first quarter compared to last year.

Lufthansa also faced a wave of strikes in 2022 by staff pushing for higher wages, leading to them winning hefty wage increases.

The group — whose carriers include Lufthansa, Eurowings, Austrian, Swiss and Brussels Airlines — had to be bailed out by the German government during the coronavirus pandemic.

But it has since bounced back strongly as travel has recovered, prompting unions to argue the airline is not passing on enough of its bumper earnings to its staff in the form of pay rises.

Wednesday’s announcement represents some more much-needed good news for employers in Europe’s top economy, who have faced a tough season of wage negotiations and strikes across many sectors.

This week, German rail operator Deutsche Bahn and union GDL struck an agreement that will see train drivers work a shorter week, ending a months-long row that caused a series of crippling strikes.

The strikes have added to an already gloomy economic picture, with the German economy shrinking 0.3 percent in 2023.

READ ALSO: ‘A difficult road’: Strike-hit German rail operator agrees to shorter work week

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