Earnings Position
Deutsche Lufthansa AG reported a net profit for the 2023 financial year of EUR 6,765m (previous year: EUR -2,664m). This significant earnings increase is largely due to book gains from capital contributions in connection with Lufthansa Cargo AG and Lufthansa Technik AG. The book gains resulted from measuring the additional acquisition costs of the wholly owned equity investment in Lufthansa Commercial Holding GmbH based on the fair value of the contributed wholly owned equity investments in Lufthansa Cargo AG and Lufthansa Technik AG. This led to the release of hidden reserves in the shares of Lufthansa Cargo AG and Lufthansa Technik AG and therefore to an increase in the shareholders’ equity of Deutsche Lufthansa AG. Another factor affecting the earnings position was the significant year-on-year improvement in the financial result, which is mainly due to a better market performance of the plan assets available to meet retirement benefit obligations.
Revenue and income
58 million passengers transported
Deutsche Lufthansa AG carried 58 million passengers in 2023, which was 15% more than in the previous year (previous year: 50 million). This is around 80% of the pre-crisis figure. Capacity rose by 13 % and sales increased by 17 %. The passenger load factor was up by 2.5 percentage points to 82.6%. Traffic revenue went up by 21% to EUR 14,180m (previous year: EUR 11,720m).
Operating income up by 63%
Revenue went up by 22% to EUR 15,634m in 2023 (previous year: EUR 12,827m). This increase was due to the further recovery in flight operations. Other operating income increased by 415% to EUR 7,632m (previous year: EUR 1,483m), mainly due to the recognition of book gains from two capital contributions in connection with Lufthansa Cargo AG and Lufthansa Technik AG. Overall, operating income climbed by 63% to EUR 23,266m (previous year: EUR 14,310m).
Expenses
Operating expenses up by 11%
Operating expenses came to EUR 17,368m in the reporting year and were therefore 11% higher than in the previous year (previous year: EUR 15,588m).
The main driver of the change in operating expenses was the increase in the cost of materials and services as a result of the year-on-year increase in the volume of flight operations and higher staff costs due to wage increases. There was a single-digit percentage increase in depreciation, amortisation and impairment and other operating expenses compared with the previous year.
| T053 | TRENDS IN TRAFFIC REGIONS OF DEUTSCHE LUFTHANSA AG | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Traffic revenue | Passengers | Available seat-kilometres | Revenue seat kilometres | Passenger load factor | |||||||
| 2023 | Change | 2023 | Change | 2023 | Change | 2023 | Change | 2023 | Change | ||
| in €m | in % | in thousands | in % | in millions | in % | in millions | in % | in % | in pts | ||
| Europe | 5,318 | 14 | 43,040 | 14 | 46,599 | 6 | 37,799 | 9 | 81.1 | 2.6 | |
| Americas | 5,015 | 14 | 7,888 | 12 | 71,445 | 7 | 60,093 | 10 | 84.1 | 2.8 | |
| Asia / Pacific | 2,583 | 75 | 3,249 | 66 | 30,598 | 64 | 25,318 | 70 | 82.7 | 2.8 | |
| Middle East/Africa | 1,264 | 6 | 3,485 | 3 | 18,958 | 3 | 15,140 | 4 | 79.9 | 0.8 | |
| Total | 14,180 | 21 | 57,662 | 15 | 167,600 | 13 | 138,350 | 17 | 82.5 | 2.5 | |
The cost of materials and services rose year-on-year by 10% to EUR 10,294m (previous year: EUR 9,346m). Almost 40% of the cost of materials and services consisted of fuel expenses, which increased by 5% to EUR 3,963m (previous year: EUR 3,792m). This increase is largely due to the larger number of flights compared with the previous year and the related increase in fuel consumption. The increase was partly offset by a positive pricing effect, but was reduced by expenses for price hedging.
Expenses for external services increased by 13% to EUR 6,166m (previous year: EUR 5,474m). This change is also due to significantly higher operating activity than in the previous year. An increase in the number of maintenance inspections meant that expenses for external MRO services rose by 13% to EUR 1,578m (previous year: EUR 1,401m). Expenses for fees and charges increased by 15% to EUR 1,766m (previous year: EUR 1,530m). Expenses for passenger care, which largely consist of compensation payments to passengers for flight irregularities, were again high at EUR 487m (previous year: EUR 480m). Whereas expenses for operating leases fell year-on-year by 5% to EUR 670m (previous year: EUR 702m), charter expenses rose year-on-year by 21% to EUR 507m (previous year: EUR 418m). Discover Airlines took over significantly more routes from Lufthansa Airlines than in the previous year.
Staff costs went up by 19% to EUR 3,661m (previous year: EUR 3,075m). This increase is primarily due to higher expenses for basic pay, plus the corresponding social security contributions. Higher basic salaries also affected the employer-financed share of retirement benefit commitments, which also went up year on year.
Depreciation and amortisation rose by 6% to EUR 426m (previous year: EUR 401m) and included EUR 21m in impairment losses.
Other operating expenses of EUR 2,987m were 8% up on the year (previous year: EUR 2,766m). The further recovery in flight operations compared with the previous year also drove up expenses indirectly related to the operating business, such as sales commissions paid to agents, computerised distribution systems, credit card commissions and travel and training expenses for crews (+EUR 138m).
Certain economic hedging relationships are presented in the financial statements as balance sheet hedging relationships in accordance with Section 254 HGB. Instruments to hedge the price of future fuel requirements, foreign currency hedging transactions to hedge exchange rates as well as interest rate hedges for interest-bearing financial liabilities are combined with corresponding hedged items within valuation units in accordance with Section 254 HGB.
Earnings performance
Profit/loss from operating activities of EUR 5,898m
Profit/loss from operating activities came to EUR 5,898m in the 2023 financial year (previous year: EUR -1,278m). The significant positive earnings performance stems largely from the book gains recognised on the shares of Lufthansa Cargo AG and Lufthansa Technik AG.
Positive financial result of EUR 1,003m
The financial result amounted to EUR 1,003m in the reporting year (previous year: EUR -1,578m). It was made up of the result from equity investments of EUR 812m (previous year: EUR 754m), net interest of EUR 196m (previous year: EUR -1,797m) and other financial items of EUR -5m (previous year: EUR -535m).
| T054 | INCOME STATEMENT FOR DEUTSCHE LUFTHANSA AG IN ACCORDANCE WITH HGB | ||
|---|---|---|---|
| in €m | 2023 | 2022 | |
| Traffic revenue | 14,180 | 11,720 | |
| Other revenue | 1,454 | 1,107 | |
| Total revenue | 15,634 | 12,827 | |
| Other operating income | 7,632 | 1,483 | |
| Cost of materials and services | -10,294 | -9,346 | |
| Staff costs | -3,661 | -3,075 | |
| Depreciation, amortisation and impairment | -426 | -401 | |
| Other operating expenses | -2,987 | -2,766 | |
| Profit/loss from operating activities | 5,898 | -1,278 | |
| Result from equity investments | 812 | 754 | |
| Net interest | 196 | -1,797 | |
| Impairment of investments and current securities | -5 | -535 | |
| Financial result | 1,003 | -1,578 | |
| Current income taxes | -46 | -23 | |
| Deferred income taxes | -60 | 242 | |
| Earnings after taxes | 6,795 | -2,637 | |
| Other taxes | -30 | -27 | |
| Net profit/loss for the year | 6,765 | -2,664 | |
| Loss carried forward from the previous year | – | -3,090 | |
| Transfer to other retained earnings | -3,382 | – | |
| Transfers from the capital reserve | – | 704 | |
| Transfers from the statutory reserve | – | 26 | |
| Transfers from retained earnings | – | 5,024 | |
| Balance sheet result | 3,383 | – | |
The result from equity investments includes profit and loss transfers of EUR 528m (previous year: EUR 484m) and other income from investments of EUR 284m (previous year: EUR 270m).
With the exception of Lufthansa Cargo AG, all the other subsidiaries with profit and loss transfer agreements reported a positive earnings performance compared with the previous year. The earnings contribution from Lufthansa Cargo AG came to EUR 127m (previous year: EUR 1,317m). This significant year-on-year drop in earnings was more than offset by the positive earnings of the other companies, and the result from equity investments went up overall. The improvement at Lufthansa Technik AG to EUR 523m (previous year: EUR -25m) played a large part in this, because its earnings the previous year were reduced by negative changes in the market value of plan assets for retirement benefits. Other positive earnings contributions came from Lufthansa Commercial Holding GmbH (EUR 32m; previous year: EUR -88m), Miles & More GmbH (EUR 137m; previous year: EUR 83m) and Delvag AG (EUR 17m; previous year: EUR 14m). Reduced losses at Eurowings, LSG and CityLine also had a positive effect. The result for Eurowings GmbH came to EUR -201m (previous year: EUR -368m), losses transferred by Truffle Holding AG (formerly LSG Lufthansa Service Holding AG) were EUR -97m (previous year: EUR -374m), and the loss at Lufthansa Cityline GmbH came to EUR -8m (previous year: EUR -75m). Other income from investments included the dividends from Austrian leasing companies of EUR 280m (previous year: EUR 270m).
Net interest came to EUR 196m in the 2023 financial year (previous year: EUR -1,797m). The significant increase year-on-year in the fair value measurement of the pension fund assets used for the fulfilment of retirement benefit obligations, amounting to EUR 819m (previous year: EUR -1,598m), was a significant factor. This was offset by the accrued interest expense, largely on pension provisions, of EUR 307m and interest expenses of EUR 258m within the Group.
Impairment losses of EUR 5m on investments and current securities recognised in the financial result were significantly lower than in the previous year (EUR 535m). They stemmed largely from a valuation allowance on the carrying amount of the investment in Verimi GmbH. The previous year’s figure was primarily due to the valuation allowance on the carrying amount of the investment in LSG.
Net profit for the year of EUR 6,765m
The operating result and financial result add up to EUR 6,901m (previous year: EUR -2,856m). In the reporting year, expenses for income taxes, largely for previous years, came to EUR 46m. Deferred tax expenses of EUR 60m were also recognised in the financial year. Other tax expenses in the reporting year came to EUR 30m (previous year: EUR 27m). The net profit for the 2023 financial year was therefore EUR 6,765m (previous year: EUR -2,664m).