Deutsche Lufthansa AG has issued a warning regarding increased risks, including a substantial rise in fuel costs and a possible shortage of kerosene later in the year. The airline group estimates an additional $1.7 billion burden from rising fuel prices for the year, prompting a more cautious profit outlook and the expedited implementation of additional cost-saving strategies.
The airline group's adjusted EBIT for the first half of 2026 was -$229 million, a $378 million decrease year-on-year. However, the second quarter saw a positive adjusted EBIT of $383 million. For the full year, Lufthansa now anticipates an adjusted EBIT between $1.7 billion and $2.2 billion, a revision from its previous forecast of significantly higher earnings than the previous year's $1.96 billion. This range reflects increased uncertainty and risks, particularly from the ongoing Middle East conflict's impact on kerosene prices.
In response to these challenges, Lufthansa is accelerating its strategy implementation, which includes significant capacity reductions and fleet modernization. Measures include removing Lufthansa CityLine's flight operations and its 23 Canadair CR-9 aircraft, as well as the early retirement of fuel-intensive long-haul aircraft like the Airbus A340-600 and the temporary grounding of two Boeing 747-400s. These steps aim to reduce fuel consumption, mitigate the impact of unhedged fuel costs (which make up about 20% of their needs, with 86% hedged), and simplify the fleet. The company's operating expenses rose by 7% to $21.39 billion, primarily due to increased fuel expenses.
Lufthansa also reported a 2% year-on-year decline in passenger business capacity during the first half of 2026, while the passenger load factor improved by 1.9 percentage points to 82.4%. Net capital expenditure for 2026 is now expected to be around $2.5 billion, down from the previously forecasted $2.9 billion due to fewer planned aircraft deliveries. Analyst reactions noted that Lufthansa's second-quarter results missed expectations, and shares dropped by over 10% following the revised outlook.
