Lufthansa Group on Tuesday (3 November) cut its 2026 profit outlook for the second time as rising fuel costs weighed on the airline group, despite strong third-quarter earnings.
Lufthansa now expects full-year adjusted earnings before interest and tax (EBIT) of between €1.7 billion and €2 billion, down from a previous upper estimate of €2.2 billion. The group reported an adjusted operating profit of €1.96 billion in 2025 and had previously expected 2026 profits to be “significantly above” that level.
The group – which includes Lufthansa, Austrian Airlines, Brussels Airlines, Swiss and ITA Airways – saw its quarterly fuel bill rise by more than €543 million year on year. Lufthansa now expects its full-year fuel bill to rise by about €2 billion to €9.3 billion, compared with a previously expected increase of around €1.5 billion.
Lufthansa Group CFO Till Streichert described fuel price volatility as “a substantial earnings headwind” for the fourth quarter. During Tuesday’s earnings call, he said fuel cost pressure “will remain with us into 2027 and despite our comparatively strong hedge position we expect next year’s fuel bill to exceed the level of 2026”.
Streichert added that the group remained focused on “what we can control”, including “selective” capacity deployment in 2027. Growth will focus on intercontinental traffic, while continental capacity is expected to shrink year on year.
Lufthansa Group CEO and chairman Carsten Spohr also pointed to potential fare increases in 2027. Faced with ongoing fuel price rises and supply chain delays, he said the aviation industry has “learnt that our product can be sold at higher values and the customers are still there”.
“The market has created a new equilibrium and, wherever the fuel is, this gives me confidence that this industry has learnt to maximise the value of its product in a different way than we have before and that’s partly [what’s behind] the optimism fuelling us going into 2027,” he said.
Last month, Lufthansa won a bidding war with Air France-KLM to acquire a minority stake in TAP Air Portugal. Spohr described the deal as “a major step in the long-term development of our group [and] in our strategy to become an even more European company”.
Lufthansa executives on Tuesday also expressed confidence that the group would increase its stake in Italian carrier ITA Airways to 90 per cent by Q1 2027. “This will pave the way for ITA’s full organisational and financial integration into Lufthansa Group,” Streichert said.
Q3 metrics
Overall group revenue rose 9 per cent year on year to €12.2 billion in Q3, driven by ‘strong’ premium demand on long-haul routes to Asia and North America.
Despite higher fuel costs, quarterly adjusted EBIT increased 6 per cent year on year to €1.4 billion, spurred by “strong operating revenues and cost discipline”.
Spohr said during the earnings call that “exceptionally strong” premium demand from both sides of the Atlantic in helped offset the region’s fuel costs “by more than 100 per cent”.
He added: “While intercontinental business remains the main value generator for Lufthansa, continental traffic also showed a strong [demand] trend in Q3, supported by streamlined network and improved corporate demand.”
Spohr also said corporate demand to and from the APAC region “remains strong” as corporate customers continue to ban travel to the Middle East.
Adjusted profits improved year on year across all network airlines except flagship carrier Lufthansa Airlines, where earnings were affected by collective bargaining agreements following a series of strikes earlier this year.
Passenger load factor across the group’s network airlines fell 1.3 percentage points to 86.2 per cent.
The group’s maintenance and cargo businesses also contributed to quarterly earnings, with Lufthansa Cargo tripling its quarterly operating profit to €162 million.