The Lufthansa Group has explained that the situation in the Middle East is having a major impact on both air travel demand and fuel costs.
As for passenger demand, the group has benefited from travelers seeking to avoid connections via Middle Eastern hub airports, which has had a particularly positive effect on seat load factors and revenues in March. The group has also responded by operating additional flights on routes to Asia and Africa. Strong premium-class demand has contributed to increased revenue.
Meanwhile, the current blockade of the Strait of Hormuz has tightened fuel supply and led to a substantial rise in fuel prices. Although roughly 80% of the group’s fuel requirement for this year is already hedged, the increase in fuel prices is expected to push additional costs within the year up to 1.7 billion euros.
Carsten Spohr, Chief Executive Officer (CEO), stated, “Global air travel demand remains at a high level and has proved resilient even in times of crisis. In light of this situation, the Lufthansa Group expects travel demand to remain robust through the summer of 2026.”
Chief Financial Officer (CFO) Remco Steenbergen said, “Based on the current booking trends, we expect to gradually offset the surge in fuel prices through higher revenues, with the effect becoming particularly visible in the second half of the year. Our cargo business also remains strong, providing continued support to earnings.”
At this stage, the group does not foresee any fuel supply restrictions at any of its hub airports, but is closely monitoring the potential decline in fuel procurement capacity in the latter part of this year as an additional risk factor. The full-year adjusted EBIT is expected to remain significantly above the level of the previous year.
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This article was generated using automatic translation by GPT-4 API. The translation may not be accurate.
