Deutsche Lufthansa (LHA) Q4 2024 earnings summary

Executive summary

• Revenue grew 6% year-over-year to EUR 37.6 billion, but adjusted EBIT fell 39% to EUR 1.6 billion due to strikes and cost pressures, with the core airline posting a EUR 94 million loss while other group airlines and Technik remained profitable.

• Net income for the year was EUR 1.4 billion, with a proposed dividend of EUR 0.30 per share and a payout ratio of 26%.

• The acquisition of a 41% stake in ITA Airways was completed in January 2025, supporting international expansion and network growth.

• Operational stability improved in Q4 2024 and into early 2025, with customer satisfaction rising and premium investments showing results.

• A turnaround program with 700 measures is underway to reduce complexity and stabilize operations.

Financial highlights

• Revenue reached a record EUR 37.6 billion, with two consecutive quarters above EUR 10 billion.

• Adjusted EBIT margin dropped to 4.4% from 7.6% in FY 2023.

• Operating costs rose 9%, driven by inflation, staff costs, and higher MRO and fees.

• Adjusted free cash flow was EUR 840 million, down 54.5% year-over-year; net debt stable at EUR 5.7 billion; net debt/EBITDA at 2.0x.

• Irregularity costs surged 70% to over EUR 840 million, mainly from strikes and operational issues.

Outlook and guidance

• 2025 is expected to be a transition year, with moderate capacity growth (~4%) and significant adjusted EBIT improvement anticipated.

• Adjusted free cash flow is expected to remain stable due to higher net CapEx (EUR 2.7–3.3 billion).

• By 2026, the turnaround program is expected to deliver EUR 1.5 billion in gross adjusted EBIT effect, rising to EUR 2.5 billion by 2028.

• Fuel bill for 2025 projected at EUR 7.9 billion, with 79% hedged; mandatory SAF quota adds EUR 0.2 billion.

• Consensus EBIT of EUR 1.9 billion for 2025 is considered reasonable.