Lufthansa Group has warned that its fuel bill is likely to go up by €1.7 billion this year due to the impact of the Middle East crisis.
The European aviation giant insisted that "robust" demand, network optimization and cost "discipline" would help to mitigate the rapid rise in fuel costs—oil prices have increased by more than 80 percent since the start of the Iran war in late February.
Lufthansa has already responded to the crisis by cutting 20,000 flights from its summer schedule and shuttering its Lufthansa CityLine regional subsidiary.
Carsten Spohr, Lufthansa CEO and executive board chairman, said that rising fuel costs and operational constraints posed "enormous challenges for the world as a whole, for global air travel, and for our company as well." Spohr made his comments as the group announced its Q1 earnings on Wednesday.
"However, we are resilient in our ability to absorb these impacts," added Spohr. "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 that Lufthansa was responding to the current crisis and increase in fuel costs by "executing our strategy much faster."
"The crisis has acted as a catalyst bringing forward decisions that we had already strategically planned," he explained. "Never waste a good crisis."
Travel Demand 'Remains High'
In its Q1 earnings report, the group said that global demand for air travel "remains high and continues to prove resilient even in times of crisis."
"Against this backdrop, Lufthansa Group again expects a strong travel summer. Additional momentum comes from shifts in passenger flows: travellers are increasingly shifting from airports in the Gulf region to Lufthansa Group hubs against the backdrop of the Middle East crisis," added the company.
Lufthansa reported an operating loss of €612 million for the first quarter of 2026, compared with a loss of €722 million in Q1 of 2025. The group's performance was boosted by an 8 percent year-on-year rise in revenue to €8.75 billion for the quarter, although three days of strikes at Lufthansa Airlines in February and March cost the company €40 million.
The group said that it had benefited from being 80 percent hedged on its fuel requirements for 2026, although the spike in fuel prices would still cost it an extra €1.7 billion this year. European rival Air France-KLM last week said it expected its fuel costs to increase by $2.4 billion this year due to the Middle East crisis.
Lufthansa's carriers, which also include Austrian Airlines, Brussels Airlines, Eurowings, ITA Airways and Eurowings, maintained "nearly stable" capacity year-on-year in Q1. This included "slight growth" in long-haul capacity as services were added to destinations in Asia and Africa, which were offset by some cuts in short and medium-haul services.
The group added that "strong demand was also reflected in higher yields in the premium segment," while passenger load factor increased by 3.6 percentage points year over year to 82.2 percent "driven by a strong surge in demand in March following capacity reductions via Middle Eastern hubs."
Till Streichert, Lufthansa chief financial officer, said the group was "satisfied" with its Q1 performance, but the Middle East crisis was compelling it to "rigorously examine every lever available to reduce costs, improve efficiency and mitigate risks."
"Our annual profit will likely be lower than originally anticipated," added Streichert. "Nevertheless, based on current booking trends, we expect to be able to largely offset the high fuel costs successively—especially in the second half of the year.
"Provided there are no fuel supply bottlenecks or further strikes, I therefore remain confident, despite increased risks, that we can achieve a full-year result significantly above prior-year levels."
Streichert added that "currently we do not have shortages" in fuel supply up to June, despite fears that the European industry may start to suffer from a lack of fuel in the coming months.
"We are convinced that our fuel supply will be fully secured, particularly in our own hubs," he said during the earnings call. "Nevertheless, we are also making plans for the scenario if this should change."
Lufthansa is also asking the European Commission to ease regulations on the type of jet fuel airlines can use, as well as temporarily waiving rules on the use of airport slots in case carriers need to cancel flights at short notice due to a lack of fuel at airports. Spohr said he was "quite optimistic" that these rule changes would not be required but it was "better to be ready."
Despite the current elevated risks, Lufthansa added that it was "maintaining its guidance" for 2026—it still expects to achieve an operating profit "significantly above" last year's figure of €1.96 billion, which Streichert explained meant a year-on-year increase of "more than 10 percent."