By Joanna Plucinska and Ilona Wissenbach
LONDON, March 6 (Reuters) – Lufthansa said on Friday it was shifting capacity from 10 cancelled Middle Eastern destinations to routes such as Singapore and Bangkok as it contends with disruption from the U.S.-Israeli war on Iran.
Airlines across Europe, including budget carrier Wizz Air, have been redirecting capacity after suspending services in the Middle East.
Lufthansa said the move also helps meet demand on long-haul routes that Middle Eastern carriers cannot currently serve.
Airline stocks have slumped this week as U.S. and Israeli airstrikes on Iran – and retaliatory strikes by Iran across 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 added the outlook was uncertain, particularly for jet fuel costs.
The schedule changes came as the German group reported better-than-expected 2025 results, saying stricter financial management and fleet renewal had helped contain costs and lift profits. Its shares rose as much as 4%, before reversing to trade down 1.2% at 1246 GMT.
The company said demand on routes to and from Asia and Africa had risen strongly since the conflict began on Saturday, and it would stick with its focus on expanding long-haul services. Spohr said new flights to Asia would launch in days.
Lufthansa did say how many services it had cancelled because of the conflict.
While carriers face costs for rescheduling and rerouting, the biggest impact for those outside the Middle East is expected from surging fuel prices. Brent crude futures have jumped more than 20% this week.
Spohr said Lufthansa was well hedged in the short term. The group hedges fuel up to 24 months ahead and was 85% hedged as of December 31, according to its annual report.
RESILIENCE
European carriers, including Lufthansa, benefited from slightly lower fuel bills in 2025. Lufthansa’s fuel bill fell 7%, helping support earnings as passenger demand stayed firm.
“Last year we were able to significantly increase the Group’s operating profit and achieved the highest revenue in our history. Our results demonstrate the resilience and stability of the Group,” Spohr said.
Lufthansa reported an adjusted operating profit of 2 billion euros ($2.3 billion), compared with 1.9 billion euros forecast in a company-compiled analyst poll and up from 1.6 billion euros in 2024. The group also posted an operating margin of 4.9%, up from 4.4% a year earlier.
Lufthansa aims to lift operating margins to 8%-10% between 2028 and 2030 from 4.4% in 2024, but strikes by workers, including the most recent on February 12, have made it harder to boost profitability.
Bernstein analyst Alex Irving said ongoing weakness in the passenger airline segment persisted, but that strong performances in Cargo and Lufthansa Technik helped lift profits.
The carrier said the outlook for 2026 was unclear due to geopolitical uncertainty. It projected capacity growth of 4%, alongside increased revenue and profit margin.
($1 = 0.8610 euros)
(Reporting by Joanna Plucinska. Editing by Mrigank Dhaniwala and Mark Potter)
