FRANKFURT (Reuters) – Germany’s Lufthansa said on Thursday it further narrowed its losses in the second quarter and recorded its first positive cash flow since the start of the coronavirus crisis, citing faster than planned cost cuts.
The group, which also owns Eurowings, Swiss, Brussels and Austrian Airlines, said its adjusted operating loss narrowed to 952 million euros ($1.13 billion), down 43% from a year earlier and lower than the 971 million euros forecast on average in a company-provided poll.
Revenue came in at 3.2 billion euros against a 3.3 billion euro forecast.
Lufthansa, which in June laid out plans to return to profitability with fewer planes and staff than it had before the coronavirus pandemic pummelled the travel industry, said it continued to expect high demand for tourist destinations and recovery in business travel in the second half of the year.
The group reported adjusted cash inflow of 340 million euros in the second quarter after a 1.13 billion outflow a year earlier.
“We have been able to stop the outflow of funds in the current phase of reviving our business and generate a positive cash flow for the first time since the beginning of the pandemic,” Chief Executive Carsten Spohr said in a statement.
The group said its airlines carried 7 million passengers in the quarter ending June 30, 18% of the pre-crisis levels in 2019, but as planned offered capacity gradually improved over the quarter to reach 40% at the end of June.
Lufthansa also confirmed its target to reach 40% capacity level for the entire year 2021, with the operating loss significantly below last year’s nearly 5.5 billion euros.
The airline said it has already reached half of the 3.5 billion euros in cost cuts targeted by 2024, six months earlier than planned, citing better than expected uptake of voluntary redundancy programs in Germany and Switzerland.
The plans envisage a fleet that will be 20% smaller but more efficient, and a 1.8 billion euro reduction in staff costs.
($1 = 0.8450 euros)
(Reporting by Ilona Wissenbach and Tomasz Janowski; Editing by Maria Sheahan)
