Lufthansa Lifts Profit Outlook as Travelers Pay Up for European Trips

Nothing, it seems, can slow the Lufthansa Group down. Robust travel demand, particularly for its premium offerings, drove record profits in the second quarter and has lifted its outlook for the rest of the year.

"Demand remains extraordinarily strong," group CEO Carsten Spohr said during a June quarter earnings call Thursday. That is driving its forecast of a roughly 25% increase in revenue earned per passenger mile flown, or unit revenues, in the third quarter. The biggest gains are to Asia, where many countries only began reopening late last year, and across the Atlantic to the Americas.

Demand for air travel, however, looks a lot different than it did four years ago:

Leisure demand continues to dominate, particularly from the premium leisure travelers who have become a force in the global airline industry throughout the Covid recovery. Corporate travel, like at most international airlines, has plateaued at passenger volumes that are roughly 60% of 2019 levels. However, Spohr described the outlook for this fall as "increasingly positive." Lufthansa doubts domestic German domestic business demand will ever fully recover.

This is broadly the trend in Europe where the recovery is six months or so behind the U.S. Travel demand remains robust and yields, a rough proxy for airfares, conti