Lufthansa cuts 2026 profit guidance to €1.7-2.0 billion on higher fuel costs

The company said the upper end of its earlier range "no longer appears likely" to be reached. The midpoint of €1.85 billion sits about 7% above company-compiled consensus, Deutsche Bank said, adding that faster fourth-quarter unit revenue growth would be key. Shares rose more than 3% in early trading on Tuesday.

The constraint is cost, not demand. Lufthansa confirmed that capacity growth will stay flat for the year, even as its network airlines increased capacity modestly in the third quarter. It cannot fly its way out of a bigger fuel bill.

A €9.3 billion fuel bill

Lufthansa now expects to spend €9.3 billion on fuel in 2026, against €7.27 billion in 2025, roughly €2 billion more. Separately, the group cited an expected €600 million increase in fuel costs as prices rose in recent months, the driver behind the guidance cut.

Finance chief Till Streichert said the increase reflects the geopolitical situation. He said the group had hedged 86% of its passenger airlines' 2026 fuel requirements and more than 60% of 2027 needs. Finimize reported it was 75% hedged in the first half. Hedging buys time, not certainty: as contracts roll off, the effective price resets toward the market. Flat capacity leaves less volume to dilute a higher cost per flight. Ryanair chief executive Michael O'Leary told Euronews in October that European airfares could rise significantly in 2027, citing fuel costs, taxes and fewer seats.

In the third quarter alone, fuel costs rose €543 million year on year, Euronews reported. Chief executive Carsten Spohr said higher revenue and strict cost discipline more than offset an increase of "approximately half a billion euros".

A record revenue quarter

Third-quarter adjusted EBIT rose 6% to €1.41 billion from €1.33 billion a year earlier, beating the €1.37 billion average analyst estimate. Revenue rose 9% to €12.24 billion, above the €12.08 billion expected and the group's strongest quarter on record for revenue.

Lufthansa Cargo did much of the lifting. Its adjusted EBIT was €162 million, up from €49 million and above the €109 million consensus. The company said reduced capacity among competitors in the Middle East and sharply higher fuel costs pushed up cargo prices. Lufthansa Technik reported €200 million against €130 million, above the €165 million consensus. Network Airlines, which includes Lufthansa, SWISS, Austrian Airlines and Brussels Airlines, posted €853 million, down 11% from €961 million and below the €904 million consensus. The core Lufthansa airline's quarterly adjusted operating profit fell by a third to €300 million.

Over the first nine months, revenue rose 8% but net profit fell 35%.

What decides the final number

Streichert said the full-year result depends on passenger demand. It also depends on fuel prices and Lufthansa Cargo's fourth-quarter performance. The group expects fourth-quarter cargo earnings to be at least at the previous year's level.

Lufthansa has already cut flying. CityLine's 27 operational aircraft left the schedule in April. Cuts affecting 20,000 short-haul flights through October were estimated to save around 40,000 tonnes of jet fuel. The group also plans to cut 4,000 administrative jobs by 2030.