Lufthansa expects positive second quarter cash flow | New
Lufthansa Group announces significant increase in air travel bookings and expects positive cash flow in the second quarter of 2021 thanks in part to its restructuring.
The company, which lost 1.1 billion euros ($ 1.3 billion) before interest and taxes in the first quarter, now expects to reach a profit margin of 8% in 2024, Lufthansa said on June 14. .
“As the roll-out of vaccination programs accelerates and travel restrictions are gradually relaxed globally, bookings at the group’s airlines have increased dramatically,” Lufthansa said.
The company’s bookings in May and early June were double their March and April levels. Lufthansa expects to carry 30% in June of the number of passengers it carried before the pandemic, rising to 55% in August.
“Demand is particularly strong for European leisure destinations around the Mediterranean Sea, as well as for long-haul leisure markets where there are only limited or no travel restrictions,” the airline said. “Supported by the acceleration of reservations, the group expects positive operating cash flow in the second quarter of 2021.”
Lufthansa has embarked on a restructuring amid the pandemic that the company says will save it € 3.5 billion by 2024.
The plan involves shutting down Lufthansa’s SunExpress Deutschland branch, stopping “passenger flight operations” at Germanwings branch and shutting down “several other bases and sites”.
Lufthansa has reduced its workforce by 26,000 employees since the start of the pandemic. The airline had 138,000 employees at the end of 2019.
Lufthansa will also save money through “harmonization of aircraft maintenance and other operating processes” and through changes in information technology, including a 50% reduction in “systems for operations”. aerial and ground, ”he says.
In addition, the restructuring of Lufthansa involves the reduction of 30% of its offices, the renegotiation of “contracts with key suppliers” and the elimination of certain consulting and marketing services.
These measures aim to “preserve cash, strengthen liquidity, reduce costs and accelerate the transformation of the group”, specifies the company.