Lufthansa Group
Fundamental analysis
The Lufthansa Group is a German multinational group that operates air passenger and cargo transportation and other services in this sector for end customers as well as for other airlines and airline companies.
The group’s main company is Lufthansa, the flag carrier of Germany (which does not make much money), followed by Swiss airlines (which make a lot of money) and other companies such as Austrian Airlines, Brussel Airlines and Eurowings. The group has partial stakes in ITA, AeroLogic, SunExpress and airBaltic.
Air transport has been experiencing growth since Covid. According to Airport Council International, 2024 was a year that matched or even slightly exceeded the number of passengers carried in 2019.
Unfortunately, this is not entirely true of German airports. The increase in fees and taxes in Germany over the last 5 years has caused the number of passengers and the number of seats offered not to surpass 2019 and probably won’t for a long time. But presumably the new German government has signalled a possible downward shift in fee policy.
In 2024, the Lufthansa Group operated a total of 735 aircraft, 91 of which were acquired through leasing. The total number of aircraft increased by 14 units last year.
Lufthansa Technik is the largest independent aircraft repair company, serving more than 800 customers worldwide.
Results for 2024 compared to 2023
The company’s turnover was €37.6 billion (+6%), of which €31.4 billion was transportation
EBIT was 1.6 billion Euro (-39%). Lufthansa itself, however, had EBIT of -94 million Euro. (In 2023, EBIT was +854 million Euro).
Net income was EUR 1.38 billion (- 18%)
In total, the company operated 991,752 flights (+ 5%)
The number of employees again exceeded 100,000 (now 101,709)
Technical analysis
The share price reacted to the recently published results by rising by more than 12%.
Thus, the RSI is now in the overbought zone as the price change was significantly larger than the normal daily movement.
The moving averages have crossed into growth after more than a year of downtrend.
The stock is now at strong resistance at 8 euros per share.
Conclusion
The Lufthansa Group is one of the largest air carriers in the world. It operates in all air transport segments (long-haul, short-haul, cargo). The different companies within the group differ in their products and customer focus. This gives the Group flexibility in the European and long-haul passenger market. Passengers can choose the carrier of their choice. Furthermore, the Group owns the vast majority of its aircraft, so it is not burdened by debts directly on the aircraft.
The company’s overall results have been good, and the stock has responded with growth. This has tipped the moving averages into growth as well.
Notable, however, is the loss of Lufthansa itself. Without it, the group would actually have earned more. If Lufthansa manages to get into the black, the share price could rise further. This could be helped by a change in the fee structure at German airports. However, if Lufthansa does not manage to get into the black, it could instead create a bigger loss than in 2024 and the share price could then fall. It will also be important to monitor the share price around the strong resistance at the €8 price.