Lufthansa Group on Tuesday lowered its 2026 profit outlook after higher fuel costs and labor strikes in Germany weighed on second-quarter earnings, echoing similar pressures reported by European rivals Air France-KLM and IAG.
Full-year adjusted earnings before interest and taxes now are expected to come in between €1.7 billion and €2.2 billion, down from the group's previous forecast for earnings to be "significantly above" last year's €1.96 billion result. Full-year capacity is now expected to be flat year over year, compared with previous expectations for growth of up to 2 percent.
The fuel bill for the European aviation group, which includes Lufthansa, Austrian Airlines, Brussels Airlines, Swiss and ITA Airways, increased 40 percent year over year in the quarter, adding around €750 million in costs compared with the same period last year. A series of labor strikes in Germany in April also reduced quarterly earnings by "at least" €150 million at its flagship Lufthansa Airlines.
To mitigate these headwinds, the group increased ticket prices and cut network capacity by around 1 percent, removing its least profitable short- and medium-haul routes and "accelerating the wind down" of feeder airline Lufthansa CityLine.
Group CEO Carsten Spohr said the company was also "affected much more than competitors" by delayed aircraft deliveries, after receiving only six of the 11 aircraft planned for Q2.
"[Aircraft] delays hitting us at the worst possible time in the middle of the largest fleet transformation in our company's history," Spohr said, adding that the group now expects to receive 41 aircraft this year, rather than 45.
Despite multiple geopolitical crises and broader uncertainty, Spohr said "strong" travel demand continued throughout the quarter, particularly in premium cabins, where yields were up 6.7 percent year over year, and on Asian routes.
He also noted that "a nice share of corporate customers [are] staying with us," even as Gulf carriers ramp up capacity with "competitive low pricing."
"We see quite a few, especially corporate customers, who no longer have the OK from their companies to travel on the Gulf carriers," Spohr said. "Of course, when you go to the other extreme of the market, the very price-sensitive customers are now seeing very attractive offers from the Gulf carriers, and we don't have that effect on our airplanes anymore. We'd rather keep the seats for higher-yield traffic."
Lufthansa Q2 Metrics
Groupwide Q2 revenue rose 8 percent year over year to €11.1 billion, despite a 3 percent reduction in overall capacity, largely driven by higher passenger revenue. Adjusted EBIT for the quarter fell €490 million year over year to €383 million.
The passenger load factor across Lufthansa's network airlines increased by a marginal 0.4 percentage points to 82 percent.
Group CFO Till Streichert reported "good" progress at ITA Airways, with the carrier posting a positive operating profit in the quarter. In June 2026, the group also exercised its option to acquire a majority stake in the Italian carrier, with the transaction expected to close in early 2027.
Streichert added that Lufthansa Airlines' "turnaround" program is "progressing according to plan" and is expected to boost gross EBIT by at least €1.5 billion by the end of the year.
He said the company had also initiated "several EBIT safeguarding measures across the entire group," including cuts to discretionary spending and external hiring.
During an earnings call on Thursday, Spohr said the group plans to cut more than 4,000 administrative roles by 2030, including around 500 in Germany, "through the rapid automation of internal processes, mainly driven by artificial intelligence."
Despite the turbulence, Lufthansa maintained a cautiously positive outlook for the second half of the year.
"Even though uncertainties for the second half of the year remain high, we are confident that the consistent execution of our strategy, cost discipline, network optimizations and persistently high demand will offset a significant portion of the cost increases," Streichert said. "However, the growing volatility of fuel prices in recent times, as well as the considerably shorter booking cycles in the passenger airline business, are making forecasting increasingly difficult."
TAP Air Portugal
Lufthansa and Air France-KLM each last week submitted binding offers for a minority stake in TAP Air Portugal.
Spohr said on Thursday that TAP would benefit from Lufthansa Group's "strong growth prospects and proven ability to realize synergies among its members." He added that Lisbon would also complement the group's Star Alliance hub system, which is "further East than our competitors, better than the hubs of other alliances."
As part of the offer, he said TAP would gain access to Lufthansa's Atlantic Joint Venture with United Airlines and Air Canada under the existing antitrust immunity granted by the US Department of Transportation. "This is why our proposal to the Portuguese government also incorporates modules that have been specifically agreed and designed with United Airlines," he said.
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