Lufthansa Group Adjusts Full-Year Guidance Due to Jet Fuel Price Volatility
Lufthansa Group, a leading airline conglomerate based in Germany, has updated its full-year guidance in response to the unpredictable fluctuations in jet fuel prices. The company now projects adjusted pre-tax earnings between €1. 7 billion and €2. 2 billion for the year 2026, which is approximately $2 billion to $2. 5 billion. This is a shift from their previous prediction of profits “significantly above” their 2025 result of €1. 96 billion.
In a statement, the company explained that the upper end of the guidance range still reflects a considerable increase from the previous year’s earnings and is in line with their previous financial goals. However, the range also takes into account the heightened uncertainty caused by the volatility of kerosene prices and shortened booking cycles in the passenger business.
To combat the impact of rising fuel costs, Lufthansa Group has been taking proactive measures throughout the year. In May, its airlines reduced 20,000 flights until October and temporarily suspended service to three European destinations. The group has also implemented changes and streamlining efforts within its European network across its subsidiary carriers to improve efficiency.
CEO and Chairman of Lufthansa Group, Carsten Spohr, acknowledged that the company was unable to fully offset the rise in fuel costs during the second quarter. However, he also noted that the global demand for air travel remains strong and their investments in premium products, such as Allegris and Swiss Senses, are starting to yield positive results. Spohr also highlighted the encouraging second-quarter performances of the core Lufthansa brand, Lufthansa Cargo, and Lufthansa Technik, the group’s maintenance, repair, and overhaul division.
The increase in jet fuel prices in February and March, following Iran’s closure of the Strait of Hormuz in response to attacks from the U. S. and Israel, has been a significant factor in Lufthansa Group’s financial adjustments. Since then, the prices have been closely tied to the developments of the conflict, decreasing when a ceasefire was agreed upon and rising again when the deal broke down and fighting resumed. While prices in early August have risen compared to June and early July, they may stabilize or decrease now that the U. S. has halted air strikes on Iran.
On Tuesday, U. S. Treasury Secretary Scott Bessent revealed that talks with Iran are currently underway, and an announcement regarding the permanent reopening of the Strait of Hormuz could be made as early as Tuesday or Wednesday. This could potentially bring some stability to jet fuel prices and alleviate some of the uncertainty faced by Lufthansa Group and other airlines in the industry.
In conclusion, Lufthansa Group’s decision to adjust its full-year guidance is a reflection of the ongoing challenges and uncertainties caused by the volatility of jet fuel prices.