Lufthansa, Germany's largest airline, expects to incur 1.7 billion euros (nearly $2 billion) in additional fuel costs this year due to the "huge challenges" posed by the situation in the Middle East. Lufthansa said in its first-quarter earnings report on Wednesday that it had locked in 80% of its jet fuel hedging position. It is expected to increase fuel costs by 1.7 billion euros in 2026, and plans to offset this expense through cost control and increasing ticket revenue.
On May 4, 2026, a Lufthansa passenger plane passed by the exhibition tower and landed at Frankfurt Airport in Hesse, Germany. The airline reports quarterly earnings on May 6.
The first-quarter financial report showed that Lufthansa’s adjusted operating loss before interest and taxes was 612 million euros; revenue rose to 8.7 billion euros (equivalent to 10.2 billion U.S. dollars), an increase of 8% from 8.1 billion euros in the first quarter of last year. Net profit was 665 million euros, compared with 885 million euros in the same period a year earlier.
Lufthansa CEO Carsten Spohr said: "Our financial performance has improved significantly in the first quarter compared with the same period last year. However, the ongoing Middle East crisis, rising fuel costs and operational constraints have brought huge challenges to the world, the civil aviation industry and the company itself. However, we have the resilience and ability to withstand shocks."
Europe is facing a shortage of aviation fuel due to the ongoing impact of the shipping blockade in the Strait of Hormuz. International Energy Agency chief Fatih Birol warned last month that Europe was just weeks away from running out of fuel supplies.
According to data from the International Air Transport Association, aviation fuel prices surged 103% at the end of March compared with the previous month.
In order to save 40,000 tons of aviation fuel and cut loss-making routes, Lufthansa has cut 20,000 short-haul flights.
At the same time, other European airlines have also been hit by rising fuel prices. British low-cost airline easyJet said it incurred new fuel costs of 25 million pounds ($34 million) in March; its main operating loss before tax for the half year ended March 31 was between 540 million and 560 million pounds.
EasyJet said that the passenger purchase cycle has been delayed and the demand for booking tickets for the rest of this year is weaker than last year. The company has locked in a 70% fuel hedging ratio for the summer, leaving the remaining 30% exposed to volatile oil price swings.
Birol, director of the International Energy Agency, pointed out that as the tourist season approaches, demand for aviation fuel will be 40% higher than in March. Europe relies on Middle Eastern refineries for around 75% of its jet fuel.
"The remaining part originally came from some major Asian countries, but these countries have now introduced export restrictions. Europe is turning to the United States and Nigeria to seek imported supplies. If Europe cannot increase imports from the above countries in time, fuel supply will be in trouble." Birol said.