Lufthansa faces €2 billion extra fuel bill as Iran war keeps prices high

Lufthansa Group reported strong earnings for the July–September quarter on Tuesday, as higher revenue and cost-cutting measures more than offset higher fuel prices.

The company’s adjusted operating profit rose by 6% year-on-year to €1.4 billion for the quarter, which includes the peak summer season. Revenue rose 9% to €12.24 billion, making it the group’s strongest quarter on record for revenue.

"With rising revenues amid consistently high demand and strict cost discipline, we were able to more than offset the increase in fuel costs of approximately half a billion euros," Lufthansa CEO Carsten Spohr said in a statement.

Due to the sharp rise in kerosene prices caused by the conflict in the Middle East, the company reported an increase in fuel costs of €543 million year-on-year for the third quarter.

The pressure is being felt across the industry. Ryanair chief executive Michael O’Leary told Euronews in October that European airfares could rise significantly in 2027 as higher fuel costs, taxes and fewer available seats push up prices.

Lufthansa's network airlines increased capacity modestly, with SWISS, Austrian Airlines and Brussels Airlines all improving their quarterly results. But Lufthansa’s core airline lagged behind as its third-quarter adjusted operating profit fell by a third to €300 million.

The overall group results were largely supported by Lufthansa Cargo, which more than tripled adjusted operating profit to €162 million, and Lufthansa Technik, which increased its adjusted operating profit by 54% to €200 million.

The strong quarterly results contrast with the first nine months’ figures, when revenue rose by 8%, but net profit fell by 35%.

Lufthansa has already cut flights and grounded aircraft to reduce costs. Its CityLine subsidiary’s 27 operational aircraft were withdrawn from the group’s schedule in April, and the company subsequently announced cuts affecting 20,000 short-haul flights through October.

Lufthansa estimated these would save around 40,000 tonnes of jet fuel.

The group also tightened spending on recruitment, internal events and external consultants, alongside its existing plan to cut 4,000 administrative jobs by 2030.

Chief Financial Officer Till Streichert said the group expected healthy demand in the fourth quarter, but its full-year fuel bill was now forecast to reach €9.3 billion because of the geopolitical situation.

This compares with €7.27 billion in 2025, an increase of roughly €2 billion.

Lufthansa hedged 86% of its passenger airlines’ fuel requirements for 2026, using financial contracts to lock in prices in advance and protect against jumps in market prices, Streichert said. He added that more than 60% of those requirements for 2027 are also hedged.

The group now expects full-year adjusted operating profit of €1.7 billion–€2 billion, lowering the upper end of its previous €1.7 billion–€2.2 billion forecast.

Streichert added that the final result will depend on demand, fuel costs and the performance of Lufthansa Cargo in the fourth quarter.

The company's share price was up by more than 3% in early trading on Tuesday.