Lufthansa publishes financial results for Q1 2020

The travel restrictions implemented as a consequence of the global spread of the coronavirus had a significant impact on the Lufthansa Group’s earnings development in the first quarter of 2020. 

Lufthansa Group announces high losses

On a preliminary basis, Group revenues fell by 18 percent to 6.4 billion euros (previous year: 7.8 billion euros) in the first quarter. In March alone, revenues declined by almost 1.4 billion euros or 47 percent. Cost reductions could only partially offset the revenue decline in the quarter. On a preliminary basis, the Lufthansa Group’s loss in the first quarter of 2020 amounts to around 1.2 billion euros (previous year: 336 million euros). The Group expects crisis-related asset impairments and the negative development of the value of fuel hedges to have a further significant negative impact on Group profit in the quarter. Details will be published in the quarterly financial statement, which has been postponed to the second half of May (originally scheduled to be published on April 30).

Losses are expected to rise

At present, it is not possible to foresee when the Group airlines will be able to resume flight operations beyond the current repatriation flight schedule. The Group therefore expects a considerably higher operating loss in the second quarter compared to the first quarter. Available liquidity currently amounts to around 4.4 billion euros. Financing measures totalling around 900 million euros since mid-March have helped strengthen liquidity. In particular, bilateral credit lines were drawn down and short-term loans were taken out.

Lufthansa announces financial results

However, in view of the business outlook, existing multibillion liabilities related to trade payables and refunds of cancelled tickets as well as upcoming repayments of financial liabilities, the Group expects a significant decline in liquidity in the coming weeks. The Group does not expect to be able to cover the resulting capital requirements with further borrowings on the market. The Group is therefore in intensive negotiations with the governments of its home countries regarding various financing instruments to sustainably secure the Group’s solvency in the near future. The Management Board is confident that the talks will lead to a successful conclusion.

Cut of 10.000 jobs

On Friday, Lufthansa CEO Carsten Spohr addressed all the employees of Lufthansa and announced that he expects to cut 10.000 jobs due to the COVID-19 crisis. The group has 130.000 employees worldwide. Furthermore, he pointed out that Lufthansa won’t be able to survive the crisis without government aid. He expects that the capacity in 2020 will not be higher than 50% anymore and announced that it is high-likely that by April 2021, the capacity will reach 75% maximum. A couple of weeks ago, Lufthansa announced to ground parts of its fleet permanently, including some A380.


  1. Paul G says

    My guesstimate is that flight and passenger numbers will recover close to pre-COVID-19 levels in 6 to 10 months after the lock downs are lifted. This means that revenue will return. With Lufthansa soon to be flush with government bailout cash ($11 billion U.S. is what LH has asked for from the German government) and with increased fees, cost cuts, reduced in-cabin service and amenities, lower staff and aircraft numbers, LH will come out of COVID-19 financially stronger than many airlines or businesses.

    By late summer international routes will be up and running and a full schedule – at least full in terms of any re-sized aircraft numbers in each airline fleet – will be seen by November-December 2020. All hysteria on the projection front.

    The EU, UK, worldwide, governments are dumping trillions to pump up and maintain businesses, airports, airlines, etc. Already, one senses things are quickly returning to normal in various sectors, countries. China has reopened and rebounded with unprecedented speed. Austria, Greece, U.S., Spain, Italy, Germany, Switzerland, Liechtenstein, South Korea, Sweden are all returning in steps to full opening. The lock downs will end in about 1 to 2 months worldwide. It’s just about over and that should be the positive message sent to the public. By July most of the world will be up and running full speed ahead to make up for lost time and money.

    Globally, the large and medium trade fairs, conventions, concerts, congresses, shows, events, conferences that attract thousands of participants, customers, for the most part, have only been postponed. Some have been canceled, but 85 percent or so are still scheduled to take place in 2020 from late May to December. This means full airplanes, hotels, taxis, restaurants.

    Future holiday bookings in the U.K. are up as Brits plan their vacation escape in the millions from July through the Autumn. There will be a huge rush for flights, hotels, restaurants and attractions from pent up demand. Already, Greece has opened up for holidaymakers. Beaches, tavernas, museums, hotels, airports, rental cars, ferries are all up and running. The flood of customers will arrive in June. It will be crowded, so make reservations beforehand.

    Sicily, Italy’s tourist agency is offering to pay for half of a tourists cost if they visit and holiday on that beautiful, sunny and historic island. Already, the early indications is that people, especially from Northern Europe, Ireland and the UK, are showing great interest in the offer.

    The other side of the lock down story is that many people are swimming in cash as they have not spent their money on discretionary items, like home remodeling, clothing, vacations, restaurants. Stock markets around the globe have rebounded and stabilized from their March lows and restored confidence in peoples’ financial situation.

    True, some people will be financially hurting for months, but many will be ready to open their wallets to rejoin the stage of life and all that it has to offer. Green shoots and good times are not far off.

    People, businesses will be back to their routine in no time. It’s embedded in their DNA – consider the European experience in the 14th century and the Bubonic Plague. Half the population of Europe died off within 3 years! But business, work, agriculture rebounded with a new start.

    Life must and does go on regardless of the most severe human and natural events. It’s just that way.

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