Record Revenue and Improved Profitability
Group revenue reached EUR 39.6 billion (+5.4% YoY). Adjusted EBIT increased by EUR 350 million to EUR 1.96 billion, delivering an adjusted EBIT margin of 4.9%.
Deutsche Lufthansa AG
· DLAKY
March 6th, 2026
Summary
- Earnings Call Date:
- 2026-03-06
- Change Since:
- +19.15%
- Next Earnings Date:
- 2026-08-04
Earnings Call Sentiment
PositiveThe call presents meaningful operational and financial progress: record revenues, improved adjusted EBIT and free cash flow, stronger liquidity and clear momentum across turnaround initiatives, ancillaries, cargo and MRO growth. Management also outlined concrete transformation levers (One IT, fleet renewal, productivity) with explicit targets. However, near-term risks have risen materially due to geopolitical disruption in the Middle East, a sharp short-term jet fuel/jet-crack spike, cost inflation, tariff and FX headwinds and ongoing labor negotiations. Management believes the positives and hedging/operational flexibility give it the ability to increase 2026 adjusted EBIT, but the range of uncertainty has widened and outcomes depend on the duration and magnitude of recent shocks.
Company Guidance
Guidance for 2026: the Group plans around 4% capacity growth (intercontinental mid‑ to high‑single digits, continental broadly flat), expects adjusted EBIT to be “significantly above” 2025’s adjusted EBIT of EUR 1.96bn (2025 adjusted EBIT margin 4.9%) and targets adjusted free cash flow of about EUR 0.9bn (vs EUR 1.2bn in 2025); net CapEx is guided at ~EUR 2.9bn to fund up to 45 aircraft deliveries (the largest single‑year fleet expansion, ~27 widebodies), liquidity was EUR 10.7bn at year‑end 2025 and is expected to return to the EUR 8–10bn target corridor by end‑2026, financial net debt was EUR 6.4bn with leverage improving to 1.8x. Fuel: 2026 fuel bill is estimated at ~EUR 7.2bn (EUR 7.0bn fossil + EUR 0.2bn mandatory SAF), with ~82% of Passenger Airlines’ fuel needs hedged for the remainder of 2026; recent market moves imply a near‑term 20–25% higher fuel cost for March–April versus the base case and management estimates ~EUR 5m per week impact from current Middle East cancellations (Middle East capacity ~3% in Q1 vs ~2% in 2025). Cost and transformation: Lufthansa Airlines ex‑fuel CASK is expected to increase by no more than half the annual rate of inflation in 2026, the turnaround program aims for ~EUR 1.5bn of measures by end‑2026 (EUR 2.5bn by 2028), Allegris currently shows ~12% RASK uplift and ancillaries were +15% in 2025, One IT delivered >EUR 50m in 2025 and targets ~EUR 200m of annual sustainable savings by 2030.
Stronger Cash Flow, Liquidity and Leverage
Adjusted free cash flow improved to ~EUR 1.2 billion (up ~EUR 350 million YoY). Year-end liquidity was ~EUR 10.7 billion (above target corridor EUR 8–10bn). Financial net debt was EUR 6.4 billion and leverage improved to 1.8x.
Passenger Airlines Turnaround Momentum
Lufthansa Airlines adjusted EBIT improved by ~EUR 250 million in 2025; the turnaround program generated >EUR 500 million gross earnings impact in 2025 with a target of EUR 1.5 billion by end-2026 and EUR 2.5 billion by 2028.
Product Upside and Ancillaries
Ancillary revenues grew 15% in 2025. Allegris premium product is delivering ~12% higher yields (RASK uplift) versus former business class; certification and roll-out are advancing across hubs, supporting further ancillary upside.
Cargo and Logistics Outperformance
Lufthansa Cargo revenue +4% with capacity +5%; adjusted EBIT of EUR 324 million (+29% YoY). Ex-fuel unit costs fell ~6% driven by lower charter costs, IT efficiencies and better crew productivity. Recent short-term yield uplifts observed (+5% worldwide, +35% in Middle East/Asia in days following the Gulf disruption).
Lufthansa Technik Growth and Resilience
Lufthansa Technik revenue grew 12% and exceeded EUR 8 billion for the first time; third-party business +23%. Adjusted EBIT ~EUR 603 million (broadly stable) with expectations for stronger earnings in 2026 as tariff and FX headwinds normalize.
Operational Stability & Irregularity Cost Reduction
Operational improvements reduced flight irregularity costs by 43%, equivalent to EUR 362 million, contributing materially to 2025 performance and customer stability (higher on-time metrics and NPS improvements).
Early One IT Savings and Accelerated Fleet Renewal
One IT delivered >EUR 50 million of IT cost savings in its launch year with a target of ~EUR 200 million sustainable annual savings by 2030. Fleet renewal is accelerating (largest single-year order with up to 45 deliveries planned in 2026, including 27 widebodies), improving tech quota and long-term unit economics.
Operator
Ladies and gentlemen, welcome to the Lufthansa Group Q4 2025 Results Conference Call and Live Webcast. I'm Moritz, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Marc-Dominic Nettesheim, Head of Investor Relations. Please go ahead, sir.
Marc-Dominic Nettesheim
Yes. Thank you very much. And also from my end, a very warm welcome, ladies and gentlemen, to the presentation of our full year results 2025. With me on the call today are our CEO, Carsten Spohr; and our CFO, Till Streichert. Both of them will present the results for the past year and discuss our commercial outlook for 2026, and afterwards, as always, you will have the opportunity to ask questions. [Operator Instructions] Thank you very much. And with that, Carsten, over to you.
Carsten Spohr
Yes. Thank you, Marc, and a warm welcome from me as well to this full year '25 conference, which I think will start in a little bit of a different tone, not because it's our famous 100-year celebration this year, which makes it a special year for us anyway. But while we were focusing on this to a certain degree, obviously last weekend when everything was changed again. So maybe I'll share with you a few thoughts on where we are when it comes to the situation at the Gulf first, which is, as you know, very dynamic. And of course, with a few thoughts on the whole year before I hand over to Till for more details and expected by you feedback on our numbers. And of course, also, we'd like to give you a ...
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