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Lufthansa hits record revenue as Iran war fuel costs eat into profits

Lufthansa reported record revenue in its recent financial results amid the ongoing impact of the Iran war on fuel costs. The airline's profits faced challenges due to rising operational expenses.

The German airline group reported its highest-ever revenue in 2025 and improved first-quarter results in 2026 but faces increased fuel costs tied to the Iran war, leading to route cancellations and lower profit forecasts.

Fuel cost surge and operational impacts

Lufthansa expects an additional €1.7 billion ($2 billion) fuel cost burden in 2026 as jet fuel prices remain high. The conflict in Iran has forced the airline to avoid certain airspaces, resulting in longer flight times, higher fuel consumption, more staff hours, and increased maintenance demands.

In response, Lufthansa has canceled 20,000 short-haul flights through October to reduce fuel use, reflecting a broader industry trend where global carriers canceled roughly 13,000 flights in May. These cuts target older, less fuel-efficient aircraft during price spikes.

Though Lufthansa has remained profitable, it is urging passengers to book holidays early to mitigate potential surcharges and is heavily investing in fleet modernization to reduce long-term fuel risks. However, fuel price volatility continues to strain the company's financial outlook for 2026.

Financial performance and outlook

Lufthansa Group reported its highest revenue ever in 2025, rising 5% year-on-year to €39.6 billion, while operating profit increased 20%, driven by strong passenger demand. In the first quarter of 2026, revenue rose 8% year-on-year despite the Iran-related challenges and €1.7 billion in extra fuel costs.

The group maintained broadly stable capacity, balancing reductions in short- and medium-haul segments with slight growth in long-haul traffic. Lufthansa Technik and Lufthansa Cargo also contributed significantly through increased maintenance and cargo operations.

CEO Carsten Spohr acknowledged the challenges posed by the Middle East crisis and rising fuel costs but emphasized the company’s resilience due to fuel price hedging and a flexible multi-hub, multi-airline strategy.

CFO Till Streichert noted satisfaction with the first-quarter performance but said the current situation requires stringent cost controls and efficiency improvements. He indicated that annual profit will likely be lower than initially anticipated.

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