Lufthansa Group delivered a first-half net profit of €672 million ($766.7 million), up 56.6% from a net profit of €429 million a year ago.
The German carrier said the results were primarily attributed to strong demand and lower unit costs at the group’s passenger airlines. “We have achieved the best first half-year result in our company’s history,” CFO Ulrik Svensson said.
First-half revenue grew 12.7% year-over-year (YOY) to €17 billion. Traffic revenues were up 14.2%to €13.3 billion. Unit costs, excluding fuel and currency effect, decreased 1.2% YOY. Adjusted EBIT was roughly doubled to over €1 billion (1H 2016: €529 million).
Cash flow from 1H operating activities rose 47.1% YOY to €3.2 billion, driven by the positive results and more advance bookings for the third-quarter period.
“Our key financial performance indicators have been significantly further improved,” Svensson said. “Our free cash flow has almost doubled, and our net financial debt has been more than halved. Higher revenues and lower costs have enabled us to soundly finance the investments required for new aircraft and an attractive product,” he said.
The network airlines—which includes Lufthansa Passenger Airlines, Swiss International Air Lines and Austrian Airlines—raised their total first-half year revenues by just under €700 million to €11.1 billion, thanks to stronger demand in all traffic regions. “North America and Asia long-haul routes have recovered, Svensson said.
Lufthansa Passenger Airlines was again the main driver for the overall improvement in the Lufthansa Group’s 1H results, which achieved an adjusted EBIT of €569 million (prior year: €361 million).
Swiss International Air Lines announced earnings (EBIT) of €187 million, up 60% from €127 million compared to 1H 2016.
Austrian Airlines improved its 1H EBIT by €3 million YOY, reversed from a €1 million loss.
Lufthansa’s point-to-point airlines, which includes low-cost carrier Eurowings, recently integrated Brussels Airlines and its equity stake in SunExpress, almost doubled their revenues for the first half-period to €1.8 billion (prior year: €0.9 billion). Their total earnings improved by €58 million, reversed from a loss of €77 million. Both Eurowings and Brussels Airlines posted a positive result for the second-quarter period.
“All our airlines were able to improve their load factors despite raising their capacities,” Svensson added.
“Our network airlines in particular made a substantial contribution to our improved overall earnings. We are also very satisfied with the developments at Eurowings, which now has every prospect of breaking even this year—earlier than anticipated,” Svensson said, adding he expects the network carriers’ unit costs to be reduced further.
The Lufthansa Group has raised its 2017 forecast for an adjusted EBIT to be above the previous year. Fuel costs, excluding Brussels Airlines, for the second half of the year are projected to be €100 million below the previous year.
In 2016, the Lufthansa Group reported a net profit of €1.78 billion.