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Lufthansa (LHAGR; Baa3, BBB-, BBB-; S) {LHA GY Equity}

CONSUMER CYCLICALS
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  • Lufthansa confirmed the conditions of its agreement with the union on salaries for 20,000 ground staff; it will see 7% pay increase (retroactive to 1 Jan '24) followed by €150+2% increase (avg. 5%+) in March '25. It will also pay €3000 in inflation compensation by Nov '24 (€60m total).
  • Union was initially looking for +12.5% and €3k inflation bonus - final outcome is milder on the wages increase given ~12.5% spread over 2yrs.
  • As we said EBIT margin target of 8% is not in sight right now for company based on consensus and we see staff cost inflation already baked in - equities traded through it into the close.
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  • Lufthansa confirmed the conditions of its agreement with the union on salaries for 20,000 ground staff; it will see 7% pay increase (retroactive to 1 Jan '24) followed by €150+2% increase (avg. 5%+) in March '25. It will also pay €3000 in inflation compensation by Nov '24 (€60m total).
  • Union was initially looking for +12.5% and €3k inflation bonus - final outcome is milder on the wages increase given ~12.5% spread over 2yrs.
  • As we said EBIT margin target of 8% is not in sight right now for company based on consensus and we see staff cost inflation already baked in - equities traded through it into the close.