Lufthansa Group reported an uptick in demand for its intercontinental routes following the escalation of conflict in the Middle East over the past week. The European aviation giant on Friday also confirmed it will add flights on several routes to Asia and Africa in the coming days as a direct result of the crisis, with plans to grow its long-haul service capacity by 6 percent year over year in 2026.
"The massive concentration of global traffic flows via the Gulf hubs is increasingly proving to be a geopolitical Achilles' heel," said Lufthansa Group CEO and chairman Carsten Spohr during a press conference.
"We are offering special flights and want to improve frequency on routes to Singapore, Bangkok and India, while demand for destinations in China and South Africa has also grown significantly in the last five days," he added.
Spohr said the group already has deployed extra flights from Bangkok to some of its European hubs, while additional flights to Singapore, Cape Town, Shanghai, Delhi and possibly also Riyadh are "being planned" with schedules likely to be published in the next three days.
"This will allow for a significant increase in travel possibilities for people who are stuck in those locations… and also for people who have booked with other airlines [to travel to these locations] and who are now being booked on additional [Lufthansa] flights."
Spohr added that bookings to Asia for the month of April are currently up 75 percent compared to last year, pointing to a longer-term shift in travel demand as perceptions of safety in the Gulf region take a hit.
"There will be a shift in travel streams as far as the Gulf is concerned, where the attractiveness will suffer, but also travelling over the Gulf will not be as significant as it has been in the last three years," he stated.
"We know from previous crises that two things happen: People want to go to safe regions and they want to travel with a strong brand, so we are in a very good position. … Lufthansa and Swiss stand as the epitome of stability in the aviation industry, and we will profit from these so-called soft factors but also from hard factors because of our better fuel hedging and, because of the expected price increases, we can also attract more customers and generate more profits."
Spohr acknowledged that airspace closures over the Middle East and Russia will lead to longer travel distances, "which means higher prices, but the market determines the price and this goes for fuel prices as well." Both Spohr and Lufthansa financial chief Till Streichert said the group's "solid" fuel-hedging strategy will "give us a competitive advantage in an environment of rising oil prices."
Full-Year Financial Metrics
Lufthansa Group, which includes Lufthansa, Austrian Airlines, Brussels Airlines, Swiss and ITA Airways, reported a 5 percent year-over-year increase in total revenue to €39.6 billion and an operating profit of €2 billion, up from €1.6 billion a year prior. This was driven by lower fuel costs, capacity growth and a €90 million contribution to earnings from ITA, which is currently being integrated into the wider group.
Overall capacity across Lufthansa's airline brands increased 4 percent year on year, while load factor remained flat at 83.2 percent. Executives also noted a rebound in transatlantic demand in the fourth quarter following weakness in the previous quarter.
The group's "core brand" Lufthansa Airlines increased annual revenue by approximately €250 million compared to a year prior, resulting in an adjusted profit margin of 0.9 percent that executives attributed to the airline's ongoing "turnaround" program.
Despite geopolitical uncertainty, the group expects to increase total capacity by around 4 percent in 2026, "with a clear focus on intercontinental routes," Streichert said, along with "a further increase in revenue and a significant improvement in earnings."
"We are confident about the coming year," Streichert said. "We expect costs to rise again but we will be able to partially offset this through our transformation programs and fleet modernization." The group expects to take delivery of 45 new aircraft this year.
Streichert added: "The current crisis in the Middle East is having a noticeable impact on our business, but it also brings opportunities as well as challenges: On the one hand, higher fuel prices and unavoidable cancellations in the affected region are putting pressure on our business. On the other hand, we are currently seeing an enormous increase in demand on our Asia and Africa routes due to the situation in the Persian Gulf."