Key facts
- Lufthansa warned its operating profit could fall this year due to higher fuel costs.
- The airline's second-quarter operating profit more than halved to €383 million.
- Geopolitical crises, including the U.S.-Iran war, have driven fuel price volatility.
- Lufthansa plans to retire or ground several fuel-intensive aircraft to reduce costs.
Lufthansa warned on Tuesday that its operating profit could fall this year after earnings more than halved in the second quarter, citing higher fuel costs linked to geopolitical crises. The German airline group's shares fell sharply as investors reacted to the uncertain outlook and worse-than-expected quarterly results, particularly rising unit costs.
Chief Executive Carsten Spohr stated that despite improvements in load factor and yield, the company could not fully offset the considerable rise in fuel costs. The U.S.-Iran war, which began in late February, sent fuel prices surging, and they remain volatile. This volatility poses a significant challenge for businesses, including European airlines like IAG and Air France-KLM, which have also been impacted by elevated fuel expenses.
Lufthansa's adjusted earnings before interest and taxes (EBIT) fell to €383 million in the second quarter, below analysts' average forecast. The company now expects €1.7 billion to €2.2 billion in adjusted EBIT for 2026, a downward revision from previous projections. The group also anticipates 2026 fuel costs of €8.66 billion. To mitigate these costs, Lufthansa plans to retire or temporarily ground several fuel-intensive aircraft, including Airbus A340-600s and two Boeing 747-400s.
Despite the challenges, Lufthansa maintained its longer-term targets, including an operating margin of 8% to 10% between 2028 and 2030. Analysts suggest that Lufthansa is justified in raising ticket prices to offset higher expenses.