Lufthansa Swings to Half-Year Loss as Kerosene Costs Bite

A €750 Million Fuel Shock, With Worse to Come

Lufthansa's half-year accounts laid bare how exposed European network carriers remain to jet-fuel swings when geopolitical risk flares. The group reported a €542 million loss for the first six months of 2025, against a €127 million profit in the same period of 2024, with finance chief Till Streichert pinning roughly €750 million of additional kerosene costs on the war in the Middle East. The bigger concern is the trajectory: hedging covers most of the group's fuel book, but roughly a fifth is bought at spot, and Streichert told analysts that the cost overhang could swell to around €1.5 billion by year-end if prices stay elevated. That single line item turned what had been a comfortable full-year outlook into a guidance cut.

Guidance Slashed, Shares Punished

Until June, management had guided for adjusted operating profit to clearly exceed the prior year's roughly €2 billion. That target is gone. Lufthansa now guides to €1.7–2.2 billion for 2025, implying a worst case about 15% below 2024 and a best case only modestly above it. The market reaction was swift: the shares dropped more than 10% intraday on Tuesday. Spohr's attempt to talk up the upper end of the range — "we are confident we can deliver what we promised last year" — did little to reassure investors, since the lower bound now sits well below the prior commitment. The €383 million adjusted operating result at the halfway mark, down from €870 million a year ago, sets a steep hill to climb in the second half, particularly on routes where tickets were sold before fuel costs spiked.

Capacity Discipline and a 4,000-Headcount Reshape

Behind the numbers, Lufthansa is leaning harder on its restructuring playbook. Group revenue still grew 8% to €19.9 billion and passenger numbers held above 60 million, while load factor nudged up to 82% after the airline cut more than 2% of capacity, retiring Lufthansa Cityline early and trimming short-haul and Gulf routes. Spohr signalled more short-haul cuts are coming — "we are looking at removing a further one percent of capacity" — alongside deeper cuts at regional German airports now connected to only one or two hubs rather than all of Frankfurt, Munich and Zurich. The 4,000-position redundancy programme is already running, with 550 roles already identified, and the group is targeting an operating margin of up to 10%. Whether jet-fuel, ticket pricing, and the recent cut to Germany's air-traffic tax from July allow that margin to materialise is now the central debate for Lufthansa investors.