Key Highlights
- Lufthansa shares climbed more than 8% following first-quarter results that surpassed market predictions
- Adjusted operating deficit improved to €612M, outperforming the €659M analyst consensus
- Revenue increased 8% to €8.7B, though falling below the €9.3B analyst projection
- Middle East conflict has generated €1.7B in additional fuel expenses through 2026 to date
- 2026 annual guidance remains unchanged, projecting profit significantly exceeding 2025’s €1.96B
Lufthansa delivered first-quarter losses that came in narrower than market expectations on Wednesday, triggering an enthusiastic market response with shares climbing over 8% during early Frankfurt trading.
The German aviation group posted an adjusted operating deficit of €612 million for the first quarter, outperforming the €659 million loss that market analysts had anticipated. The figure represents meaningful progress compared to the €722 million loss reported during the corresponding quarter last year.
Revenue reached €8.7 billion, representing an 8% increase year-over-year. This figure, while showing growth, came in below the €9.3 billion that analysts had projected.
The ongoing Middle East conflict continues to create a dual impact on Lufthansa’s operations. The situation has significantly increased jet fuel expenses. Simultaneously, it has redirected passenger flows through Lufthansa’s network hubs, creating stronger demand across both passenger services and cargo operations.
The Iran conflict has contributed €1.7 billion in additional fuel expenses through the current year. This represents a substantial cost burden. In response, Lufthansa plans to increase ticket prices, reduce flight frequencies, and implement further cost-reduction initiatives throughout the upcoming quarters.
Lufthansa has already eliminated 20,000 flights from its summer schedule to address capacity challenges related to the fuel supply situation.
Annual Guidance Maintained With Qualifications
Even with the fuel cost challenges, Lufthansa confirmed its full-year 2026 profit projection. The airline group anticipates adjusted operating profit will substantially exceed the €1.96 billion achieved in 2025.
CFO Till Streichert included an important qualification — the forecast stands “provided there are no fuel supply bottlenecks or further strikes.”
This qualifier carries significant weight. Labor actions from cabin crew and pilot unions throughout April resulted in €150 million in costs for the carrier. Lufthansa issued two profit warnings during 2024 due to labor disruptions, making this a continuing concern.
Streichert also verified that fuel availability at Lufthansa’s operational hubs should remain stable through June. For long-distance routes to Asia and Africa, the airline is developing backup strategies that may involve intermediate refuelling stops.
Market Analyst Perspectives
Barclays analyst Andrew Lobbenberg observed that the first-quarter performance exceeded expectations by a smaller margin than what competitor Air France-KLM reported the previous week. However, he highlighted that preserving guidance — considering the €1.7 billion fuel cost increase and April labor disruptions — demonstrated “marked confidence in future unit revenues.”
CEO Carsten Spohr echoed this sentiment, stating the airline is “resilient in our ability to absorb these impacts.”
Lufthansa continues advancing its comprehensive restructuring initiative, aiming for a profit margin between 8% and 10% during the 2028 to 2030 period.
Shares traded 6% to 8% higher in Frankfurt by mid-morning Wednesday.
