Lufthansa posts record revenue but warns Iran war fuel costs will hit annual profit
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The surge in jet fuel prices has become a primary concern for the European travel industry, with Lufthansa finding itself at the centre of this crisis.
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According to Lufthansa’s latest earnings report, the airline expects an additional €1.7 billion ($2bn) fuel cost burden in 2026 as soaring jet fuel prices continue to weigh on the industry.
The need to avoid certain airspaces has led to longer flight times, which naturally increases consumption. These adjusted routes also require more staff hours and higher maintenance cycles, adding layers of complexity to an already strained global supply chain.
As reported by Euronews, global airlines have already cancelled approximately 13,000 flights this May, while Lufthansa alone has axed 20,000 short-haul flights through to October in a bid to cut fuel consumption.
This reduction in capacity is a direct response to the unsustainable cost of operating older, less fuel-efficient aircraft during price peaks.
While Lufthansa has managed to stay profitable, the jet fuel price spikes have forced the firm to advise passengers to book their holidays as early as possible to avoid further surcharges.
The company is currently investing heavily in its “fleet modernisation” programme to mitigate these risks in the long term, though the immediate impact of fuel volatility continues to weigh on the balance sheet.
Lufthansa remains committed to its financial targets, but the volatility of the global oil market remains the largest variable in its 2026 outlook.
“We are satisfied with the first quarter […] at the same time, the current situation compels us to rigorously examine every lever available to reduce costs, improve efficiency and mitigate risks in order to maintain our ability to act decisively. Our annual profit will likely be lower than originally anticipated,” CFO Till Streichert stated.
The Lufthansa Group has announced a landmark financial performance, revealing that it generated the highest revenue in its history in 2025. Revenue rose by 5% compared with the previous year to €39.6 billion.
According to the latest figures, the airline group also saw its operating profit grow by 20% compared with 2024, highlighting a robust recovery in passenger demand.
In the first quarter of 2026, year-on-year revenue climbed 8% despite challenges linked to the conflict involving Iran, including €1.7 billion in additional costs caused by volatile jet fuel prices and the suspension of dozens of routes.
The firm kept its capacity broadly stable with slight growth in long-haul traffic compensating for capacity reductions in short and medium-haul segments.
Lufthansa Technik and Lufthansa Cargo also significantly contributed to earnings with demand for maintenance, repair and overhaul services increasing, as well as through the marketing of ITA Airways’ cargo space.
Global demand for air travel remains high and continues to prove resilient even in times of crisis, as Lufthansa Group again expects a strong summer travel season.
“In the first quarter, we significantly improved on the previous year’s financial results […] but the ongoing crisis in the Middle East, combined with rising fuel costs and operational constraints, poses enormous challenges for the world as a whole, for global air travel and for our company as well,” CEO Carsten Spohr stated.
“However, we are resilient in our ability to absorb these impacts. This applies both to our above-average hedging against fuel price fluctuations and to our multi-hub, multi-airline strategy, which provides us with greater flexibility in our route network and fleet development,” Spohr added.