German carrier Lufthansa said Thursday that it cut its losses by two-thirds in 2021, but warned of uncertainty for the industry from the coronavirus pandemic and the Russian invasion of Ukraine.
Europe’s largest airline group — which includes Eurowings, Austrian, Swiss and Brussels Airlines — reported net loss of 2.2 billion euros ($2.4 billion) in 2021, compared with a bottom-line loss of 6.7 billion euros ($7.42 billion)a year earlier.
Lufthansa said it expected business to improve this year, but “major uncertainties” surrounding Ukraine and the future course of the pandemic made it difficult to provide a more detailed forecast.
Russia’s invasion of its neighbor has disrupted Lufthansa’s services, with the airline suspending flights to both Russia or Ukraine.
The escalation in the conflict involving the major energy supplier Russia has also given a push to already high prices for fuel.
The rising cost of oil would create “additional burdens” for the group, Lufthansa said, while saying it expected to weather increases better than competitors.
Increases in airport charges and the “remaining uncertainties regarding the course of the pandemic” further troubled the outlook for the industry.
Passenger numbers increased in 2021 by 29 percent compared to the previous year, when travel restrictions due to the pandemic caused the figure to tumble.
“We are very certain that air traffic will experience a strong upswing this year,” chief executive Carsten Spohr said in a statement.
Lufthansa said it expected “an average capacity of more than 70 percent” in 2022 compared to the pre-pandemic year 2019, up from 40 percent this year.
The group also said it expected “further year-on-year improvements” for 2022 in its operating result, where it cut losses to 2.3 billion euros ($2.55 billion) from 5.5 billion euros ($6.09 billion), despite higher-than-expected restructuring costs.
Lufthansa recorded its first quarterly operating profit since the start of the pandemic in the third quarter of 2021, but slipped back to a loss of 271 million euros ($300.27 million) in the period from October to December.