Deutsche Lufthansa AG has issued a warning of mounting risks, forecasting a muted profit outlook for 2026. The airline expects an additional fuel cost burden of approximately $1.7 billion (€1.7 billion), which could rise to nearly $2 billion, largely due to soaring jet fuel prices and the need to avoid certain airspaces following the conflict involving Iran. This has resulted in longer flight times, increased consumption, and higher operational costs.
Despite these challenges, Lufthansa reported record revenue for the first quarter of 2026, with an 8% year-on-year increase to $10.2 billion. The company improved its net income by 25% from a loss of $1 billion to a loss of $780 million, and its Adjusted EBIT improved by $129 million to a loss of $718 million. However, CFO Till Streichert indicated that the annual profit would likely be lower than originally anticipated, although he expects high fuel costs to be largely offset in the second half of the year through increased revenue, optimized network planning, and cost-saving measures.
The airline has already canceled approximately 20,000 short-haul flights through October to reduce fuel consumption and optimize its network. While Lufthansa has around 77% hedge coverage for its 2026 jet fuel costs, significantly more than competitors like Air France-KLM (62%), concerns persist regarding potential bottlenecks for jet fuel availability, especially if the conflict in the Middle East escalates. The blockage of the Strait of Hormuz, through which a quarter of Lufthansa's jet fuel normally passes, remains a critical factor. Lufthansa has reportedly replaced about half of its Persian Gulf jet fuel with supplies from other sources or reserves.
Publicly, Lufthansa has adopted a more optimistic stance regarding summer fuel supplies, with COO Dieter Vranckx stating that fuel supply is stable and that no further cancellations are anticipated. This position is partly to reassure travelers and partly due to adapted supply chains. The company maintains its full-year guidance, anticipating a result significantly above prior-year levels, provided there are no fuel supply bottlenecks or further strikes.
