Lufthansa beats profit target; outlook uncertain

Published Fri, Mar 6, 2026 · 05:30 PM

[LONDON] Lufthansa reported better-than-expected 2025 results on Friday (Mar 6) as stricter financial management and fleet renewal helped it contain costs and boost profits, but the outlook remained clouded by the war in the Middle East.

The German group’s shares rose as much as 4 per cent in early trading, before retreating to stand up 0.5 per cent at 11 am GMT.

Airline stocks have been hammered this week as US and Israeli airstrikes on Iran – and retaliatory strikes by Iran in the Gulf – have disrupted long-haul flights and sent oil prices soaring.

“The war in the Middle East proves once again how exposed air traffic is and how vulnerable it remains,” Lufthansa chief executive officer Carsten Spohr said.

The company said it had experienced substantially higher demand for routes to and from Asia and Africa since the conflict began on Feb 28, adding it would stick with its strategy of expanding long-haul services.

Spohr told reporters that new flights to Asia would be launched in days.

While airlines face costs for rescheduling and rerouting services, the biggest impact for those outside the Middle East is likely to come from surging fuel costs. Brent crude oil futures have jumped 17.2 per cent this week.

Spohr said Lufthansa was well-hedged and shielded in the short term from spikes in oil prices.

“Resilience”

European carriers, including Lufthansa, benefited from slightly lower fuel bills in 2025, bolstering earnings as passenger demand stayed strong.

Lufthansa’s fuel bill fell 7 per cent.

“Last year, we were able to significantly increase the group’s operating profit, and achieved the highest revenue in our history. Our results demonstrate the resilience and stability of the group,” Spohr said.

The company reported an adjusted operating profit of two billion euros (S$3 billion), compared with 1.9 billion euros forecast in a company-compiled analyst poll and up from 1.6 billion euros in 2024.

It also posted an operating margin of 4.9 per cent, up from 4.4 per cent a year earlier.

Lufthansa aims to lift operating margins to 8 to 10 per cent between 2028 and 2030.

However, strikes by workers, including the most recent on Feb 12, have made it harder to boost profitability.

Bernstein analyst Alex Irving said ongoing weakness in the passenger-airline segment persisted, but added that strong performances by Lufthansa Cargo and Lufthansa Technik helped bolster profits.

The carrier said the outlook for 2026 was unclear due to geopolitical uncertainty. It projected a capacity growth of 4 per cent, alongside increased revenue and profit margins. REUTERS