Key Takeaways
- Lufthansa shares surged more than 8% following first-quarter performance that exceeded Wall Street projections
- Operating loss on an adjusted basis came to €612M, outperforming the consensus estimate of €659M
- Quarterly revenue increased 8% to €8.7B, though it underperformed analyst projections of €9.3B
- Middle East conflict has generated €1.7B in additional fuel expenses through the first four months of 2026
- 2026 annual guidance remains intact, with profit expected to significantly exceed 2025’s €1.96B result
The German aviation giant delivered first-quarter results on Wednesday that topped Wall Street estimates, sending shares climbing over 8% during morning trading hours in Frankfurt.
Lufthansa’s adjusted operating deficit totaled €612 million during the first three months of the year, surpassing the Street’s consensus projection for a €659 million shortfall. The figure also represents progress from last year’s comparable quarter, which saw losses reach €722 million.
Quarterly revenue climbed to €8.7 billion, representing an 8% increase versus the prior year period. However, this top-line performance came in below the €9.3 billion that analysts had anticipated.
The ongoing Middle East crisis is creating a dual impact on Lufthansa’s operations. While jet fuel expenses have skyrocketed, the airline is simultaneously experiencing heightened demand as travelers route through its European hubs, benefiting both passenger service and freight divisions.
Through the year’s first four months, the Iran conflict has generated an additional €1.7 billion in fuel-related expenses. Management plans to address this substantial cost pressure through a combination of fare increases, capacity reductions, and operational efficiency measures throughout the remainder of the fiscal year.
The carrier has already pulled 20,000 summer flights from its schedule as part of capacity management efforts related to the fuel supply constraints.
Annual Forecast Reaffirmed With Caveats
Notwithstanding the fuel cost challenges, Lufthansa stood by its 2026 annual profit projection. Management expects adjusted operating earnings to substantially exceed the €1.96 billion achieved during 2025.
Chief Financial Officer Till Streichert attached an important qualifier, noting the forecast assumes “no fuel supply bottlenecks or further strikes.”
This conditional language carries significant weight. During April alone, labor action by cockpit and cabin crews resulted in €150 million in losses. The airline was forced to lower its earnings guidance twice throughout 2024 due to similar workforce disruptions, making this an ongoing concern for investors.
Streichert provided assurance that fuel availability at the company’s primary hubs should remain stable through the end of June. For intercontinental routes servicing Asian and African destinations, contingency measures are being developed that may involve adding refueling stops.
Wall Street Commentary
Barclays equity analyst Andrew Lobbenberg observed that while Lufthansa’s quarterly outperformance was more modest than competitor Air France-KLM’s recent results, the decision to maintain forward guidance despite the €1.7 billion fuel headwind and April labor disruptions demonstrates “marked confidence in future unit revenues.”
Chief Executive Carsten Spohr echoed this sentiment, emphasizing the carrier’s “resilient in our ability to absorb these impacts.”
The airline continues executing its comprehensive restructuring initiative, which sets a target operating margin range of 8% to 10% for the 2028-2030 period.
Shares traded between 6% and 8% higher in Frankfurt by the midpoint of Wednesday’s trading session.
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