Lufthansa braces for very slow recovery in passenger demand

By Ilona Wissenbach

BERLIN (Reuters) - German airline Lufthansa expects a very slow demand recovery in the face of the resurgent COVID-19 pandemic and now hopes to reach roughly half of its pre-crisis capacity over the course of next year, a board member told Reuters.

First-quarter capacity is expected to be up to 25% of pre-crisis levels, unchanged from the current quarter and well short of the 50% previously envisaged by the end of this year, said Harry Hohmeister, who is responsible for the group's Lufthansa, Austrian, Swiss and Brussels airlines.

"Maybe a recovery to 50% of the pre-crisis level could be possible next year, and maybe even to 60% with business trips coming back in autumn 2021," Hohmeister said, emphasising that those hopes are based on the assumption that the pandemic can be tackled with vaccines and broad testing early next year.

Reliable forecasts remain impossible for the time being, but advance bookings for private trips in June next year are close to pre-crisis levels and already above them on certain days in September.

Like other major airlines, Lufthansa has implemented significant cuts to its schedules, fleets and staff in the wake of the pandemic and is surviving on a 9 billion euro ($11 billion) government bailout.

About 350 of its 760 own aircraft are currently in use with every second seat occupied on average, Hohmeister said. However, 125 planes are set to be grounded again because of the pandemic's second wave.

Business customers, traditionally the carrier's cash cow, remain a rarity but are returning on the carrier's China routes.

"The business travel volume will remain below (the pre-crisis level) in the long term, but I do not see that we will lose 50% of these customers."

In response to fewer business trips, Lufthansa is placing a stronger focus on travellers who want to visit friends and family abroad, viewing those consumers as a reliable revenue source.

To compete with low-cost carriers, the German group also plans to bundle its airlines' offerings on long-haul tourist destinations on a single platform.

($1 = 0.8460 euros)

(Writing by Kirsti Knolle; Editing by David Goodman)