Lufthansa announced that its annual profit for 2026 is likely to be lower than initially anticipated due to a projected additional €1.7 billion ($2 billion) in fuel costs. This comes despite the airline reporting an 8% increase in year-on-year revenue for the first quarter of 2026, reaching a new record of $10.2 billion. The company attributed these rising fuel expenses to volatile jet fuel prices and the ongoing conflict involving Iran, which has necessitated longer flight times and higher consumption due to airspace restrictions.
To counter the financial burden, Lufthansa plans to implement higher ticket prices, optimize its network planning, and introduce further cost-saving measures. While the airline has hedged approximately 80% of its fuel costs for 2026, the current high prices still translate to significant additional expenses. CFO Till Streichert emphasized the need to rigorously examine all available levers to reduce costs, improve efficiency, and mitigate risks, though he expects to largely offset these high fuel costs in the second half of the year based on current booking trends.
Beyond cost concerns, Lufthansa also warned of potential kerosene supply bottlenecks later in the year, particularly if the conflict in the Middle East escalates. This concern stems from the Strait of Hormuz being largely closed to oil tankers since late February, a route that typically supplies about a quarter of Lufthansa's jet fuel. Although Lufthansa has found alternative sources and drawn from reserves, and its COO Dieter Vranckx reassured travelers about stable supply for the summer, the potential for reduced fuel availability remains a risk factor. The company had previously cut 20,000 short-haul flights through October to reduce fuel consumption and prioritize more profitable routes.
