Lufthansa CEO says jet fuel hit to top €1.5 billion forecast

By Reuters News

By Ilona Wissenbach

FRANKFURT, Sept 29 (Reuters) - Lufthansa's LHAG.DE additional jet fuel bill this year will exceed the €1.5 billion it flagged in August as the Iran war drags on and oil prices spike, CEO Carsten Spohr said.

The German group is the latest in a series of airlines, including Ryanair RYA.I, to warn about the effects of the ongoing high cost of jet fuel on the sector, which makes up 30 to 40% of airlines' costs.

"The 1.5 billion I mentioned a few months ago as the additional burden for fuel ... the figure we'll probably have to report at the end of the year will be higher", Spohr told journalists at a press event in Frankfurt on Monday.

Spohr did not say how much the airline projected the new additional fuel burden to be.

In August, the carrier said it expects total 2026 fuel costs of €8.66 billion, which include the additional €1.5 billion burden, compared with an earlier forecast of €8.9 billion. It also warned profits could be impacted.

Lufthansa has somewhat shielded itself from price volatility in jet fuel with extensive jet fuel hedging. Lufthansa Chief Financial Officer Till Streichert told analysts in August the group's fuel hedge ratio for 2026 was 86% and a bit more than 50% in 2027.

Despite the higher expected fuel cost, Spohr reaffirmed the forecast for an operating profit of €1.7 billion to €2.2 billion, compared with €2.0 billion in the previous year.

However, the airline's ambitious turnaround program, which aims for an operating margin of between 8% and 10% by 2028 to 2030, has been impacted by the spiralling costs faced by the sector, he added.

"[Our] financial performance hasn't yet brought us to our desired results this year, given the headwinds in fuel consumption that everyone else has had to contend with", Spohr said.

Despite the challenges, Spohr said that there was a boom in bookings for the premium economy and business cabins on offer, echoing a similar trend highlighted by competitors Air France-KLM AIRF.PA and British Airways owner IAG ICAG.L.

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