Lufthansa is recovering: at least the loss of substance has stopped

Cosmopolitanism is the success factor of a large airline.

As long as the travel restrictions for the USA and Asia are not eased in the wake of the corona pandemic, Deutsche Lufthansa is probably still a long way from exploiting the advantages of its global presence.

The currently increasing bookings in European travel give cause for hope in this environment.

But in order to return to the usual strengths of an international airline, a revitalization of the long-haul business is indispensable for strategic reasons alone.

After all, long-distance flights to North America accounted for a good 50 percent of Lufthansa’s flight capacity and a similarly high share of profit in the passenger business before the start of the Corona crisis.

Back to entrepreneurial freedom

The fact that travel restrictions in the USA for vaccinated passengers from Europe will possibly fall by autumn and also in China by the end of the year is the most important hope for group leader Carsten Spohr against this background.

In order to get the financial scene in the mood for the planned mega capital increase, the management can refer to the success that the impending loss of substance in the group has stopped after the current figures have been presented. The effects of increasing bookings in Europe as well as those of a tough savings plan, which will lead to the shedding of around 30,000 jobs in the group, are clearly visible. In addition to a lower loss in day-to-day business, Lufthansa’s chief financial officer Remco Steenbergen can record an inflow of liquid funds (cash flow) in the group for the first time since the beginning of the crisis.

In contrast to the passenger business, at least the subsidiaries Lufthansa Cargo (freight), Lufthansa Technik (maintenance) and LSG (on-board catering) were able to benefit directly from the global presence of their parent company. In the current half-year balance sheet, they made significantly higher contributions to earnings than before.

The fact that Spohr is keeping his airline on course despite the Corona crisis must above all convince the investors. Because the Lufthansa boss is working hard to get rid of his major state shareholder from Berlin soon and to quickly repay the state aid granted by the federal government of around 4 billion euros. Only without the requirements of a major state shareholder can Spohr regain the entrepreneurial freedom it needs to realign his group in terms of consolidation in the aviation sector. However, Spohr and his chief financial officer left it open whether the planned capital increase will be carried out before the federal election in September.