The boom in holiday travel shows no signs of ending, German airline group Lufthansa said today, as advance bookings for this winter and next year were already a double-digit percentage above the year-earlier level.
The outlook will underscore optimism in the tourism and airline sector that the recovery in demand that started last year after Covid-19 lockdowns may be more permanent, as people splurge on experiences rather than goods.
"Demand will remain exceptionally strong for the foreseeable future," Lufthansa chief executive Carsten Spohr told journalists as the group published better-than-expected quarterly profits.
Concerns have grown that the surge in demand - and resulting strong earnings - could lose momentum in the autumn season as high inflation starts to squeeze passenger spending.
Lufthansa is not seeing any slowdown, Spohr said. Bookings for the third quarter and the rest of the year exceed 90% of the pre-pandemic level at Lufthansa, with the summer season extending into October.
Other airlines have struck a more cautious note.
Ryanair, Europe's largest airline by passenger numbers, said last week demand looked robust for the rest of the summer, but cautioned that higher borrowing costs as interest rates rise may curb spending, particularly as ticket prices rise.
Aer Lingus and British Airways owner IAG said the outlook for summer travel was encouraging, although it was "mindful" of uncertainty in the wider economy.
For the German airline, Spohr said an unimpeded trend towards more premium-class flights, especially among leisure travellers, has underpinned yields and he expected ticket prices to remain at current levels for the foreseeable future.
That will help offset business travel which has lagged leisure.
It is picking up again though. The number of business passengers at Lufthansa's airlines has recovered to around 60% of pre-pandemic levels, which the group sees continuing to rise.
"Based on surveys and feedback we receive directly from our corporate customers, we forecast a further strong increase for the rest of the year," Spohr said.
"Already, business travel has recovered to over 70% on the transatlantic route, for example," he said.
Lufthansa, which owns the Austrian Airlines, SWISS and Eurowings carriers, said it was returning two more A380s to scheduled service this year, with more to follow along with new Boeing 787s and Airbus A350s in the coming year.
On long-haul routes, it said the increase in capacity would primarily come from the expansion of connections to Asia, given the re-opening of major markets such as China and Japan.
In April to June, Lufthansa's adjusted earnings before interest and tax nearly tripled to €1.09 billion, slightly above consensus for €1.04 billion, from €341m a year earlier.
For the full year 2023, it now expects adjusted EBIT to come to more than €2.6 billion, having previously forecast a significant increase from last year's €1.5 billion.
