Lufthansa predicts continued growth in holiday travel.

Lufthansa predicts continued growth in holiday travel.

The Boom in Travel: Lufthansa Predicts Strong Demand for the Foreseeable Future

Lufthansa

The pandemic-induced surge in holiday travel continues to show no signs of ending, according to German airline group Lufthansa. As advance bookings for the upcoming winter season and next year already surpass double-digit percentages of the previous year, the tourism and airline sectors remain optimistic about the recovery in demand. This trend suggests that people are now focusing their spending on experiences rather than material goods.

Lufthansa’s Chief Executive, Carsten Spohr, expressed his confidence in the ongoing demand during a recent conference call with journalists. He stated, “Demand will remain exceptionally strong for the foreseeable future,” while announcing the group’s better-than-expected quarterly profits. However, concerns have emerged that this surge could lose momentum in the autumn season as high inflation begins to squeeze passenger spending.

Despite these concerns, Lufthansa reassures that the momentum is continuing without any signs of slowing down. Bookings for the third quarter and the rest of the year already exceed 90% of the pre-pandemic levels at Lufthansa, indicating a strong summer season that may extend well into October. However, it’s important to note that other airlines are adopting a more cautious approach.

Ryanair, Europe’s largest airline by passenger numbers, stated that demand appears robust for the remainder of the summer. However, the company cautioned that higher borrowing costs resulting from rising interest rates may curb spending, particularly as ticket prices rise. British Airways owner, IAG, also expressed encouragement for summer travel but acknowledged the wider economic uncertainties.

For Lufthansa, an interesting shift towards more premium-class flights has emerged, particularly among leisure travelers. This trend has helped maintain strong ticket prices. Lufthansa’s Chief Executive, Carsten Spohr, doesn’t anticipate any significant changes in ticket prices anytime soon. The rise in premium-class bookings and prices will help offset the slower recovery in business travel.

However, there are positive signs of recovery in the business travel segment as well. Lufthansa’s airlines have reported that the number of business passengers has already reached around 60% of pre-pandemic levels, and the company expects this figure to continue to rise. Spohr remarked, “Based on surveys and feedback we receive directly from our corporate customers, we forecast a further strong increase for the rest of the year.” He highlighted that business travel has already recovered to over 70% on the transatlantic route.

In conclusion, Lufthansa’s bullish outlook for the foreseeable future suggests that the boom in holiday travel is here to stay. As people prioritize experiences and the recovery in both leisure and business travel gains traction, the airline industry remains hopeful for a sustained demand recovery. While some concerns about inflation and economic uncertainties persist, the positive signs and strong bookings indicate a promising future for the global tourism and airline sectors.

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