The German flag carrier Lufthansa has acquired an additional $ 11 billion in debt because of the covid-19 pandemic. This is clear evidence of the fact that even though air travel across the globe has improved a lot, the effects of the pandemic haven’t quite left the airlines. The factors like the significant growth in the number of flights cancellation and ever-growing debt are still keeping airlines such as Lufthansa in a severe problem.
The Current Scenario
For those unaware, the Lufthansa Group consist of a number of international carriers along with the Lufthansa itself. One such member is SWISS which has been having an even slower recovery than Lufthansa. The SWISS airline is not up for sale; however, Lufthansa expects the latter to pay back its government-backed loans by the end of 2022. Although, the chances of SWISS actually paying back its debt before the end of this year seems quite unlikely. The SWISS international carrier has been struggling to get even 80% of its pre-covid numbers. One positive side is the fact that the airline is receiving new aircrafts which might turn the luck in its favour.
While Lufthansa is still coping with the effects of the Covid-19 pandemic, the ongoing war in Ukraine which has created an oil shock in the world is another block on the airline’s path. Among the many carriers that had to cancel and re-route long-haul flight services to avoid shuttered airspace, Lufthansa was one of them. This creates a problem as the rising oil prices are bound to raise ticket prices. Although, the airline has a chance to turn the situation of rising ticket prices in its favour by capitalising on the soaring travel demand across the world.