Deutsche Lufthansa (LHA) Q1 2025 earnings summary

Executive summary

• Q1 2025 saw revenue rise to €8,127m (up 10% year-over-year), driven by strong demand, high yields, and growth in Logistics and MRO segments, though earnings were impacted by cost inflation, the Easter shift, and macroeconomic volatility.

• Adjusted EBIT improved 15% to €-722m, but net income declined to €-885m due to higher costs and one-off effects.

• Passenger Airlines expanded capacity by 4.6–5%, carrying 34 million passengers, but Adjusted EBIT fell to €-934m, mainly due to higher fees and the Easter shift.

• Customer satisfaction and operational KPIs improved, with network stability and service center accessibility both up versus prior year.

Financial highlights

• Group revenue rose by €735m to €8,127m (+10% year-over-year), with strong performances in Technik, Cargo, and passenger airlines.

• Adjusted EBIT improved by €127m to €-722m; Adjusted EBIT margin rose to -8.9% (+2.6p year-over-year); Adjusted free cash flow surged 174% to €835m.

• Net debt decreased by 8% to €5.3bn; net debt/EBITDA improved to 1.7x; available liquidity reached €11.4bn.

• Operating expenses rose 5.5–6%, mainly due to higher material, staff, and fee costs.

• Fuel bill for 2025 projected at €7.3bn, €600m below previous guidance and €500m below last year.

Outlook and guidance

• Full-year 2025 guidance reaffirmed: expects clear revenue increase, significant Adjusted EBIT growth, and stable adjusted free cash flow; net CAPEX forecast at €2.7–3.3bn.

• Dividend payout policy remains at 20–40% of net income.

• Q2 expected to see higher CASK growth due to labor cost effects, with normalization anticipated in H2 as cost measures ramp up.

• Early signs of Q3 booking softness, mainly in lower fare classes for U.S. routes, but no plans to discount fares; booking windows may be shorter.

• Flexibility to reduce capacity growth if demand weakens further, especially for North Atlantic routes.