Tag: BTIQ-Enl

The corporate travel recovery for Lufthansa Group—which
includes Lufthansa, Swiss, Austrian Airlines, Brussels Airlines and Eurowings—continues
to lag its leisure segment, with business passenger numbers still around 30
percent lower compared with 2019, Lufthansa CFO Remco Steenbergen said during a
Thursday morning earnings call.

The company, however, sees opportunity for a “nice jump
to corporate” because of its Asian network expansion. “Asia,
historically, is a part of our network with the highest corporate shares,”
Lufthansa CEO Carsten Spohr said. “We’re growing more into Asia this year
than in any other destination or region. So, I think we [will] see a miracle,
whatever you want to call it, effect on corporate in that regard.”

Steenbergen projects the corporate segment might get up to
80 percent of 2019 level in 2024

Still, Spohr admitted that “pent-up demand is not going
to jump out of the bottle and said that the corporate segment would “come
up slowly.” He noted that working from home is being reduced, and video
conferences are reduced “further and further and turned into real
meetings, so I think this trend will be there.” 

Lufthansa Q4, FY2023 Metrics

Lufthansa reported fourth quarter 2023 revenue of nearly
€8.8 billion (US$9.7 billion), a 5 percent increase year over year. Total 2023
revenue was more than €35.4 billion, representing a 15 percent increase over
2022 and the company’s third-best full-year result in its history, according to
Lufthansa. 

Full-year 2023 passenger revenue was €28.3 billion, a 24
percent increase year over year. The Group’s passenger airlines had high demand
for service to and from North America, according to the company, and for the
first time, all passenger airlines in the company reported an operating
profit—with Swiss, Austrian Airlines, Brussels Airlines and Eurowings reporting
record results. 

The company’s net profit for the fourth quarter was €67
million, down from €307 million a year prior. Full-year 2023 profit was nearly
€1.7 billion, more than double the €791 million reported in 2022. Lufthansa
reported 123 million passengers for 2023, a 20 percent increase year over year,
and capacity for 2023 increased 14 percent from 2022, but was still at about 84
percent of 2019 levels, according to the company.

Lufthansa during the fourth quarter expanded
its “green fares” to international routes, and also reported that
an increasing number of companies are taking advantage of the opportunity to
offset flight-related CO2 emissions. In 2023, more than 1,500 companies
worldwide invested in sustainable aviation fuel with the Lufthansa Group.

RELATED:Lufthansa
Q3 performance

During a November
third-quarter earnings call, Wheels Up CEO George Mattson said the company
would target corporate customers through its partnership with Delta Air Lines,
which is one of the company’s largest investors. That strategy appears to be
working. 

Through use of its charter Air Partner business, which
Wheels Up acquired in 2022, the company is “growing with high-value
corporate customers,” Mattson said during a Thursday morning
fourth-quarter earnings call. “Today, corporate flying represents over one
quarter of our FTV, and we expect corporate to be a larger segment of our
business over time as we focus across the business on corporate opportunities
and leverage our strategic partnership with Delta.”

FTV is what Wheels Up calls flight transaction value, or the
total amount its customers spend on all flight services. “We believe FTV
better illustrates the true size and breadth of our business, and it allows us
to better highlight the success of our efforts to grow our more profitable charter
business and drive a higher mix of corporate flying,” Wheels Up CFO Todd
Smith said.

The company also is “forging a tighter integration with
Delta’s sales team” and is seeing strong interest from some of the major
carrier’s “largest and most important customers,” Mattson said.
“I’m pleased to see corporate customers committing to fly with us. They
represent an increasing percentage of our customer mix and see the value in our
broad capabilities, flexible offerings and the top-notch service we provide.
That’s why our pipeline of new business continues to grow.”

Wheels Up Q4, FY2023 Metrics

Wheels Up reported fourth-quarter 2023 revenue of $246.4
million, down about 40 percent year over year, with the decrease primarily
driven by the divestiture of its non-core aircraft management business as well
as reduced flight revenue and aircraft sales, according to the company.
Full-year 2023 revenue was down about 21 percent from 2022 to nearly $1.3
billion.

The company’s net quarterly loss was more than $81 million,
down from a Q4 2022 loss of nearly $225 million. Wheels Up reported a full-year
2023 loss of more than $487 million compared with a 2022 loss of nearly $556
million.

Reported active members as of Dec. 31, 2023, were nearly
9,950, a 21 percent decline from the more than 12,660 reported a year prior.
Active users for the fourth quarter totaled more than 10,700, down 22 percent
year over year. Live flight legs also declined during the quarter by 26 percent
to just more than 14,000 from more than 19,300 and were down 19 percent for the
full year to nearly 64,500.

Flight revenue per live flight leg, however, remained steady
for the quarter, declining just 1 percent year over year to nearly $14,100. The
metric increased 2 percent for the full year to more than $13,700.

During the fourth quarter, Wheels Up introduced its new Up
for Business corporate member program, sold jointly through the Wheels Up
and Delta sales organizations. Earlier this month, it also announced
several executive changes.

RELATED: Wheels
Up Targeting Corp. Customers Through Delta

January 2024 global air demand, measured in revenue
passenger kilometers, increased 16.6 percent year over year and was at 99.6
percent of January 2019 levels, according to the latest International Air
Transport Association report, released Wednesday. In December, the 2019
comparison level was at 97.5 percent.

Total January capacity, measured in available seat
kilometers, was up 14.1 percent compared with a year prior and came within 0.5
percent of January 2019 levels, according to IATA.

International January traffic was up 20.8 percent versus
January 2023, with capacity up 20.9 percent. Total domestic air demand
increased 10.4 percent, with capacity up 4.6 percent. 

“2024 is off to a strong start despite economic and
geopolitical uncertainties,” IATA director general Willie Walsh said in a
statement. “As governments look to build prosperity in their economies in
the busiest election-year ever, it is critical that they see aviation as a
catalyst for growth.”

[Report continues below chart.]

Asia-Pacific carriers once again led other regions in international
demand growth, with January 2024 traffic up 45.4 percent versus January 2023.
Capacity increased 48.1 percent for the period. The strong growth rate is
mainly due to China, which a year earlier had begun to lift Covid-19 travel
restrictions, according to IATA, which added that “the recovery in major
international routes to/from Asia-Pacific is still lagging, but routes such as
Asia-Middle East have exceeded pre-pandemic levels.”

European carriers’ January 2024 international traffic and
capacity each increased by double digit percentages versus a year prior, and
the load factor was up 0.1 percentage points. “Routes between Europe and
North America have rebounded particularly strongly from the pandemic, and stand
6.5 percent higher than in January 2020,” according to IATA.

For North America, January international demand and capacity
each also increased by double-digit percentages year over year, however load
factor declined 1 percentage point from January 2023.

On the domestic front, January air demand increased across
all countries IATA tracked, however there was a pull-back in capacity by four
of the six countries. Those two exceptions were Australia, in which capacity
increased 6.3 percent year over year, and China, which reported a 19.2 percent
increase. 

Domestic load factors for January each were up except for
Australia, which reported a 0.7 percentage point decrease from January 2023.
China had the highest January 2024 load factor increase at 8.4 percentage
points, followed by India at 4.2 percentage points.

RELATED:  IATA:
December Air Demand Continues Recovery