Lufthansa Braces for $2 Billion Fuel Hit as Middle East Crisis Squeezes European Airlines

Germany’s largest airline is staring down a fuel bill that could reshape its finances for the year. CNBC reported Wednesday that Lufthansa now expects roughly 1.7 billion euros, close to $2 billion, in additional fuel costs during 2026. The airline blamed the ongoing Middle East conflict for straining global aviation supply chains and driving prices sharply higher.

Q1 Results Show Revenue Growth, but Profits Slip

Lufthansa’s first-quarter earnings showed an 8% year-on-year revenue increase to 8.7 billion euros, equivalent to roughly $10.2 billion. Its adjusted operating loss for the period came in at 612 million euros. Net income fell to 665 million euros from 885 million euros a year earlier. CEO Carsten Spohr told investors the quarter showed meaningful improvement over the prior year. He added, however, that the combination of Middle East instability, rising fuel prices, and operational constraints presented what he called “enormous challenges” for the airline and the wider industry.

A Continent Running Low on Jet Fuel

The pressure on Lufthansa reflects a supply crunch gripping Europe as a whole. The ongoing blockade of the Strait of Hormuz has severely disrupted regional fuel flows. The International Energy Agency’s director Fatih Birol warned last month that Europe could exhaust jet fuel stockpiles within weeks. Middle Eastern refineries currently supply around three-quarters of the continent’s jet fuel. With major Asian exporters restricting outbound sales, Europe is scrambling to source supplies from the United States and Nigeria. Birol cautioned that peak summer travel demand could push jet fuel consumption roughly 40% above March levels, tightening the crunch further.

Also Read: Oil Markets Rattle Global Supply Chains as Strait of Hormuz Tensions Rise

Lufthansa Acts to Cushion the Blow

The airline has moved quickly to limit its exposure. It has already hedged 80% of its expected jet fuel requirements for the year. It has also axed around 20,000 short-haul flights to conserve roughly 40,000 metric tons of fuel and remove routes that were no longer profitable. Lufthansa plans to offset remaining cost pressure through internal savings and higher ticket revenue.

Rivals Feel the Squeeze Too

Lufthansa is not alone. British budget carrier EasyJet disclosed an additional £25 million in fuel costs for March alone. The airline also reported a headline pre-tax loss of between £540 million and £560 million for its six-month period to March 31. EasyJet has hedged 70% of its summer fuel, leaving a meaningful portion exposed to further price swings. The carrier also flagged softer forward bookings, with customers delaying purchase decisions compared with last year.

Read Next: IEA Warns Europe Faces Imminent Energy Supply Crunch