German aviation giant Lufthansa has warned that surging fuel prices linked to the Iran conflict will significantly increase its operating costs, with its 2026 fuel bill expected to rise by €1.7 billion ($2 billion) above earlier projections.
The airline said its total fuel expenditure could reach around €8.9 billion this year, marking nearly a 20 per cent increase. The sharp rise has been driven largely by escalating jet fuel prices following disruptions in global energy supply routes, particularly the near shutdown of the strategically vital Strait of Hormuz.
Lufthansa’s Chief Financial Officer Till Streichert described fuel as the company’s most significant cost challenge for the remainder of the year, noting that price increases since the start of the Iran war have created substantial financial pressure.
Although the airline has secured fuel supplies at its major hubs until June through long-term agreements, it is preparing contingency plans in case shortages worsen. These measures may include introducing additional refuelling stops on long-haul routes if fuel availability becomes limited at certain destinations.
Despite the rising costs, Lufthansa said it is relatively better positioned than some competitors, having locked in approximately 80 per cent of its fuel requirements through forward contracts, helping to cushion the impact of price volatility.
The company has already taken steps to manage fuel-related expenses, including reducing operations by cancelling around 20,000 summer flights and shutting down a smaller subsidiary earlier than planned.
To offset the increased fuel burden, Lufthansa is aiming to boost revenue through higher ticket sales while continuing cost-saving initiatives across its operations.
The airline reported that its net loss narrowed to €665 million in the first quarter, while revenue rose 8 per cent to €8.7 billion. It also noted modest growth in long-haul travel demand, partly due to shifting passenger routes after disruptions in Gulf aviation hubs.
Despite the mounting fuel costs, Lufthansa maintained its full-year outlook, expecting its core profit to exceed last year’s performance.
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