LONDON: Lufthansa said Friday it is shifting capacity from 10 canceled Middle East destinations to routes like Singapore and Bangkok to deal with disruptions caused by the US-Israeli war on Iran.
Airlines across Europe, including budget carrier Wizz Air, are redirecting capacity after suspending service to the Middle East.
Lufthansa said the move will also help meet demand on long-haul routes that Middle East carriers cannot currently serve.
Airline stocks have fallen this week as US and Israeli airstrikes on Iran – and Iran’s retaliatory attacks in the Middle East – have disrupted long-haul flights and sent oil prices soaring.
“The war in the Middle East proves once again how exposed air traffic is and how vulnerable it remains,” Lufthansa CEO Carsten Spohr said in a statement. He said the outlook was uncertain, especially for jet fuel prices.
The schedule change came after the German group reported better-than-expected results for 2025, saying strict financial management and fleet renewal helped reduce costs and boost profits. Its shares rose as much as 4%, then fell 1.2% by 1246 GMT.
The company said demand on routes to and from Asia and Africa had increased significantly since the conflict began on Saturday, and it would maintain its focus on expanding long-haul service. Spohr said new flights to Asia would resume within a few days.
Lufthansa did not disclose the number of services it had cancelled due to the conflict.
While carriers face costs for rescheduling and rerouting, those outside the Middle East are expected to be most affected by rising fuel prices. Brent crude futures have jumped more than 20% this week.
Spohr said Lufthansa is well-hedged in the short term. The group hedges fuel up to 24 months in advance, and according to its annual report as of December 31, it was 85% hedged.
Resilience
European carriers, including Lufthansa, benefited from slightly lower fuel bills in 2025. Lufthansa’s fuel bill fell 7%, supporting earnings due to continued passenger demand.
Spohr said, “Last year, we managed to significantly increase the group’s operating profit and achieve the highest revenue in our history. Our results demonstrate the group’s resilience and sustainability.”
Lufthansa reported an adjusted operating profit of 2 billion euros ($2.3 billion), compared to the company’s analyst poll’s estimate of 1.9 billion euros, and this was higher than the 1.6 billion euros in 2024. The group also posted an operating margin of 4.9 percent, up from 4.4 percent a year earlier.
Lufthansa aims to increase operating margins to 8 percent-10 percent between 2028 and 2030, up from 4.4 percent in 2024, but employee strikes, including the most recent on February 12, have made it difficult to increase profits.
Bernstein analyst Alex Irving said ongoing weakness in the passenger airline segment persisted, but strong performance in cargo and Lufthansa Technik helped boost profits.
The carrier said the outlook for 2026 is unclear due to geopolitical uncertainty. It forecast revenue and profit margin growth, as well as capacity growth of 4 percent.
