Frankfurt Despite the many crises and an impending recession, Lufthansa remains confident. “The desire to travel and thus the demand for flight tickets continues unabated,” CEO Carsten Spohr was quoted as saying in the company’s quarterly statement on Thursday morning. The airlines in the group therefore want to offer capacity of 80 percent of the pre-crisis level in the current fourth quarter.
For the year as a whole, the group expects adjusted earnings before interest and taxes of more than one billion euros. This is also possible because the company can push through higher prices. The so-called average revenues in the third quarter were around 23 percent higher than in 2019, a new record.
Lufthansa had already published the first key figures a few days ago. Sales rose to EUR 10.1 billion in the third quarter, twice as high as in the same quarter of the previous year. Adjusted earnings before interest and taxes reached 1.1 billion euros, the operating margin was 11.2 percent.
With the continued high expectations in the background, industry experts assume that Europe’s largest airline group will again be more actively involved in the consolidation of the European aviation industry. Especially since the last obstacle to larger acquisitions has been removed. The German state aid, which had prevented larger transactions because of EU conditions, has been repaid. Lufthansa intends to repay the remaining state aid for its foreign subsidiaries Austrian and Brussels by the end of December.
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The fact that the management of the German airline is now interested in acquisitions is shown by the interest in the Italian ITA. However, Lufthansa has to give way to a consortium around the investor Certares and Air France. But the next destination is already in sight. The Portuguese government wants to privatize the national airline TAP again. The airline was nationalized to save the company from going out of business during the pandemic.
TAP is to be sold within the next twelve months
Although the sales process has not yet started, TAP is to be privatized within the next twelve months. “TAP is just getting ready for the capital market again, which fits into the picture of a planned privatization of the company,” says Andreas Meyer, founder and fund manager at Fountain Square Hamburg.
>> Read about this: What does major shareholder Kühne intend to do with Lufthansa? The uncertainty fuels speculation
Meyer has already identified the right buyer. “Lufthansa is the logical investor for us. They didn’t get a chance in Italy, but the management has always made it clear that it wants to be the driver of consolidation in Europe.”
Lufthansa itself has so far kept a low profile on the subject of TAP. But in corporate circles, it can be heard that management will take a close look at possible options. Especially since Lufthansa already had serious interest in the Portuguese airline in 2019.
Unlike ITA, TAP is already in the aviation alliance around Lufthansa, the Star Alliance. A takeover of ITA would have had the charm of pulling an airline out of a competing alliance. This is not necessary with TAP. Nevertheless, the airline with its home airport in Lisbon has a lot to offer.
The state wants to privatize the national airline. Investors see Lufthansa as a potential buyer.
(Photo: AP)
The most important are the long-distance connections to South America. Lufthansa has white spots here after several partners went missing. Varig and Avianca Brazil had to file for bankruptcy, TAM and LAN merged and finally ended up in the competing alliance Skyteam around Air France-KLM.
“TAP is an attractive target. The company will be restructured when it comes onto the market,” says investor Meyer: “The long-haul route to Brazil is an important market in which Lufthansa still has gaps. The fleet is also young.”
TAP currently operates 96 aircraft with an average age of less than ten years. For example, the airline has ten Airbus A321 LR aircraft. The medium-haul jet has been upgraded with additional tanks for long-distance routes and is considered efficient. TAP steers the planes to destinations in the USA and Brazil.
The central question from Lufthansa’s point of view should be: How much does a takeover cost? For the planned ITA deal, the management had brought the financially strong Swiss shipping company MSC on board. Because money is tight, Lufthansa is still suffering from the late effects of the pandemic. The mountain of debt was reduced further in the third quarter. Net debt has fallen from nine to 6.2 billion euros since the end of 2021. But the company still has to pay off liabilities and wants to invest billions in the fleet and new services.
In the end, one argument could speak decisively for the purchase: the risk that the rival Air France could also grab the TAP after the ITA.
More: Trial of strength at Lufthansa – major shareholder Kühne wants more than just a seat on the supervisory board