Lufthansa reported better-than-expected 2025 results on Friday as stricter financial management and fleet renewal helped the airline contain costs and boost profits, but the outlook was clouded by the war in the Middle East.
The German group’s shares rose as much as 4% in early trading, before retreating to 0.5% up at 11am GMT.
Airline stocks have been hammered this week as US and Israeli airstrikes on Iran — and retaliatory strikes by Iran across the Gulf — have disrupted long-haul flights and sent oil prices soaring.
“The war in the Middle East proves again how exposed air traffic is and how vulnerable it remains,” CEO Carsten Spohr said in a statement.
Lufthansa said it had seen substantially higher demand on routes to and from Asia and Africa since the conflict began on Saturday, 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% this week.
Spohr said Lufthansa was well hedged and shielded in the short term from oil price spikes.
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%.
“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.
Lufthansa reported an adjusted operating profit of €2-billion (R38.53bn), compared with the €1.9bn forecast in a company-compiled analyst poll, and up from €1.6bn (R30.82bn) in 2024. The group also posted an operating margin of 4.9%, up from 4.4% a year earlier.
Lufthansa aims to lift operating margins to 8%-10% between 2028 and 2030 from 4.4% in 2024, but strikes by workers, including the most recent on February 12, have made it harder to boost profitability.
Bernstein analyst Alex Irving said weakness in the passenger airline segment persisted, but added that strong performances in Cargo and Lufthansa Technik helped bolster profits.
The carrier said the outlook for 2026 was unclear due to geopolitical uncertainty. It projected capacity growth of 4%, alongside increased revenue and profit margin.
Reuters
