Air traffic recovery takes place without Germany

Carsten Spohr actually had good news to spread on Thursday.

Air traffic recovery takes place without Germany

Carsten Spohr actually had good news to spread on Thursday. The Lufthansa Group, the CEO reported when presenting the half-year figures, is back in the black after the deepest aviation crisis in post-war history. His company generated an operating profit of almost 400 million euros in the second quarter. A year ago, Germany's largest airline flew a loss of 830 million euros in the same period. "This is a strong result after a half-year that was challenging for our passengers, but also for our employees," commented Spohr. Real celebration sounds different.

In fact, dark clouds are still piling up over the crane. While international air traffic has experienced a rapid upswing in the wake of the corona pandemic in recent months, the industry has made a false start on the home market of Europe's largest aviation group of all places.

In countries such as Spain, Italy, Turkey or Greece, the number of flights in the first half of 2022 has already reached 80 to 90 percent of the pre-crisis level. In Germany, it is still bobbing at 65 percent, according to the figures published this week by the Federal Association of the German Aviation Industry (BDL). Only Sweden has an even worse value at 62 percent.

In particular, air traffic within Germany seems to have collapsed and has not even reached a quarter of what was flown before the pandemic. Many flights were canceled due to staffing problems at German airports. But BDL President Jost Lammers sees another reason for Germany's weakness: "The traditionally high proportion of business travelers in Germany is only slowly coming back," he reported in a telephone conference.

Internal German connections and business travelers – these are the traditional strengths of Lufthansa. In fact, a closer look at the Lufthansa figures shows that the airline does not currently owe its profits to its actual core business, but to the cargo area.

The transport of goods, which for a long time was more of a sideline business, experienced enormous growth during the corona and delivery crisis and, according to Spohr, generated record sales for 22 months in a row and a profit of 480 million euros in the second quarter alone. Spohr expects further growth here for the second half of the year. They are flying at full capacity in the cargo area and are currently expecting another Boeing 777 cargo plane.

For the passenger area, however, the Lufthansa boss had to dampen growth hopes and lower forecasts. After the airport capacity jumped from the first to the second quarter (from 60 to 75 percent of the pre-crisis level), the recovery will probably proceed less rapidly than originally thought.

Spohr slightly lowered the forecast for the third quarter from 85 to 80 percent of the 2019 figures. And for the coming year as a whole, he now only expects 85 to 90 percent – ​​“less than in our heads a few weeks ago, when we were all euphoric,” says Spohr.

According to his expectations, the current travel boom will not be repeated in times of inflation in the coming year. He is hoping for an indirect boost from the supply crisis. Many companies are diversifying their supply chains, Spohr argued, not only good for the freight business. "That will also help the passage, because you have to visit all the suppliers."

In fact, it is currently mainly pleasure travelers who fill the rows of seats at Lufthansa, right up to the premium seat classes, which are now booked just as heavily as the wooden class. However, mainly by wealthy private travelers. Business customers are far more reluctant to return to the terminals than tourists. Lufthansa is registering just 50 percent of the pre-crisis level for pre-bookings and already sees this as a sign of hope.

"Especially in domestic traffic, business air travel will remain well below the pre-crisis level in the long term," predicts aviation expert Heinrich Großbongardt. Many companies have learned during the crisis that routine meetings can be held very well via zoom or teams and are now simply saving on travel expenses, analyzes Großbongardt. "In addition, many companies have a decarbonization strategy and are therefore having their employees switch from planes to trains."

Are digitization and climate awareness becoming a problem for the airlines? Großbongardt does not paint black, at least for Lufthansa. “When communicating across linguistic and cultural borders, virtual meetings quickly reach their limits. Personal communication is more effective here,” he believes. “Intra-German traffic will stagnate. But Lufthansa earns its money on international connections.”

However, Spohr's hope for an early recovery in business travel finds little nourishment in the figures published by the German Travel Association on Thursday. In a study, 60 percent of the company representatives surveyed stated that business trips in their companies were increasingly being replaced by virtual meetings.

According to the survey, there are efforts to save CO₂, especially in large companies. 67 percent of respondents from companies with more than 1000 employees reported such efforts. Frequent travelers with three or more business trips per month stated that they pay attention to environmentally friendly behavior, for example by trying to combine several appointments. Bad for airlines.

In view of the reluctance of German business travelers to travel, the Lufthansa Group is increasingly earning its money abroad. The company sells around 70 percent of its tickets outside of Germany, and six of the eleven airlines in the group are based abroad. And currently Lufthansa in Italy is openly courting the takeover of a seventh, the ITA. In the country, the Lufthansa Group recorded "incredibly heavy traffic" this summer, Spohr was pleased. Different than in Germany.

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