European airlines shares surge following strong Q4
Lufthansa and Air France-KLM shares surge amid recovery and positive 2025 outlook
Lufthansa and Air France-KLM delivered better-than-expected fourth-quarter results, driven by strong passenger demand and lower fuel costs. With hopes of further growth in 2025, both airlines saw their shares reach their highest levels in years.
Key Takeaways
- Both Lufthansa and Air France-KLM reported higher-than-expected revenues and lower fuel costs, helping their shares rise significantly.
- Despite early-year struggles with inflation and maintenance costs, the airlines ended the year on a high note with improved profitability and strong demand.
- New aircraft deliveries and expected lower fuel costs position both airlines for continued revenue growth and operational efficiency in 2025.
Strong Financial Performance in Q4 2024
Lufthansa and Air France-KLM exceeded analyst expectations in the fourth quarter, driven by strong passenger numbers and reduced fuel costs. Lufthansa’s shares rose over 7%, while Air France-KLM shares surged more than 19% following the results, reports Reuters.
Deutsche Lufthansa AG share price dynamics (2021 - Mar 2025) Source: TradingView
Both airlines benefited from robust demand and improved revenue performance. Analysts noted that Air France-KLM’s results were particularly aided by higher revenues and lower depreciation, highlighting efficient cost management despite earlier headwinds.
Challenges in 2024 and Recovery Signals
The European airline industry faced significant challenges throughout 2024, including inflation-driven cost increases and the maintenance of ageing aircraft fleets. Lufthansa’s CEO Carsten Spohr described the year as a tale of two halves, with the first six months marked by a sharp decline in operating profit.
Air France-KLM was hit by several one-off events, including disruptions during the Paris Olympics and the impact of newly negotiated labour contracts, which dragged on financial performance earlier in the year. Despite these obstacles, both airlines showed remarkable recovery in the latter half of 2024, indicating a strong trajectory heading into the next year.
Positive Outlook for 2025
Looking ahead, both Lufthansa and Air France-KLM anticipate continued passenger demand growth and operational improvements. With new aircraft deliveries scheduled and fuel costs expected to remain lower, the airlines are confident they can maximize revenues and maintain profitability.
This optimism sets the stage for a strong 2025, as the companies aim to capitalize on a more favourable cost environment and an expanding fleet.
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