Letter from the Executive Board

Ladies and gentlemen, dear shareholders,

2023 was one of the best years for the Lufthansa Group in economic terms. The recovery in demand for flights after the coronavirus pandemic continued. Tourist travel was in great demand, particularly in the summer months, and we expanded our capacities again, especially to leisure travel destinations. Overall, in the past year we once again welcomed more than 120 million passengers on board our aircraft and flew them safely to their destinations.

For the first time, all our airlines were profitable. SWISS, Austrian Airlines, Brussels Airlines and Eurowings reported record results. The increase in the number of flights across the industry resulted in significantly higher demand for maintenance and repair services and so enabled Lufthansa Technik to post record earnings. Only the Logistics business segment saw a decline in earnings due to normalisation across the industry following the coronavirus-related economic upswing.

Overall, the Lufthansa Group’s earnings improved significantly compared with a year ago. Adjusted EBIT increased to around EUR 2.7bn. This means we have achieved the third-best result in the company's history. With an Adjusted ROCE of more than 13%, we were able to exceed the target of a return on capital of over 10%. We want to enable our shareholders to participate in this success and will table a proposal at the Annual General Meeting to pay a dividend of EUR 0.30 per share.

Strengthening our balance sheet was an important condition for this. We were able to reduce our debt significantly again in the financial year 2023. It is now around EUR 1bn below the pre-crisis level of the year 2019 at EUR 5.7bn. Available liquidity is significantly higher. We are therefore in a much more stable position to tackle future challenges. Our positive performance has been acknowledged by the capital markets: All the leading rating agencies now give the Lufthansa Group an investment grade rating.

We continued to pursue our transition from an aviation group to a global airline group at high speed in 2023. We sold the catering business at the end of October. The sale of AirPlus, our payment specialist, is expected to close in summer 2024. This will enable us to focus even more sharply on our core business: our airlines. Our newly founded Lufthansa City Airlines will enable us to increase the profitability of our short-haul route network and seize growth opportunities. In addition, we agreed with Italy’s Ministry of Economy and Finance on the acquisition of a non-controlling interest in the country’s national airline ITA Airways. We are in intensive discussions, particularly with the European Commission, to get the transaction approved in the current year.

Looking at the performance we delivered to our customers, the assessment of the year 2023 is not wholly positive. We were able to improve operational stability significantly compared with the previous year. However, especially in the summer months, we did not always attain the level of quality and punctuality that we strive for and that our passengers rightly expect from us.

So for the financial year 2024 it is our declared goal to live up to our premium standards across our business and to fulfil our quality promise to our passengers. We have launched a product and service offensive to this end, and as part of the biggest fleet modernisation programme in our history we are expecting the delivery of at least 30 new aircraft in 2024.

With our new cabin products, Allegris at Lufthansa Airlines and SWISS Senses at SWISS, we are again setting premium standards in the industry. We are expecting our first long-haul aircraft with the new Allegris cabin on board in time for the summer of 2024. We will be welcoming a new aircraft into our fleet every ten days on average in 2024. In the financial year 2023, we ordered a further 22 long-haul aircraft, as well as 80 short- and medium-haul aircraft. This means our order book now comprises firm orders for some 250 of the latest-generation aircraft – for more comfort for our passengers and lower emissions.

Our ambitious climate goals call for net-zero carbon emissions by 2050; by 2030, we intend to already halve our net carbon emissions relative to their 2019 level. In addition to our fleet renewal, we are increasingly making use of sustainable aviation fuels and working closely with partners in research and industry to drive their developments. We are also continuously optimising our existing fleets. Fifteen Boeing 777 aircraft with the AeroSHARK foil developed by Lufthansa Technik and BASF are already in service. This innovative surface technology reduces air resistance and carbon emissions as a result.

Despite all the necessary change, there is one thing we stand by:


That is our purpose and also the title of this year’s annual report.

Our airlines operate 4,000 flights every day to more than 300 destinations in around 100 countries. We connect families, friends and business partners, contribute to social interactions, prosperity and international understanding, and secure production and supply chains. Every day we bring the world a little closer together, create opportunities for dialogue and cross-border cooperation.

Cultural exchanges and corporate culture are a vital element of both our commercial success and the engagement and well-being of our employees. Our cultural programme promotes the individual identities of our companies and strengthens our cultural understanding of ourselves as a group at the same time – with diversity in all its dimensions as a central pillar of our cultural identity.

Together we intend to continue the Company’s positive development – for the benefit of our passengers, employees and shareholders. Despite the challenging environment, which is dominated by geopolitical uncertainties, economic volatility and persistently high inflation, our aim is to maintain last year’s earnings level. We are pleased that you are accompanying us on our journey.

Frankfurt, February 2024

Carsten Spohr

Chairman of the Executive Board

Lufthansa Group Annual Report 2023