Lufthansa cuts 2026 outlook as jet fuel bill hits €9.3 billion

By Joanna Plucinska and Ilona Wissenbach

LONDON, Nov 3 (Reuters) - Lufthansa trimmed its profit outlook on Tuesday as the German airline's estimated jet fuel bill for 2026 rose to €9.3 billion ($10.4 billion), although its third-quarter results were in line with forecasts, sending shares higher.

European carriers have warned that the rising cost of jet fuel resulting from the Iran war will weigh on their prospects, with ticket prices set to rise next year as hedges expire.

Bernstein analyst Alex Irving said the resilient quarterly results showed Lufthansa's turnaround programme may be starting to bear fruit despite the challenging fuel environment.

Lufthansa shares were up over 3% at 0944 GMT.

"With rising revenues amid consistently high demand and strict cost discipline, we were able to more than offset the increase in fuel costs of approximately half a billion euros," CEO Carsten Spohr said in a statement.

The German airline group said its total airline fuel costs rose by more than €400 million ($448 million) compared with last year. Spohr told journalists on a media call that the carrier was still planning to hedge its fuel costs in 2027, adding the carrier was 75% hedged in the first half of the year.

Lufthansa trimmed its operating profit forecast for the 2026 financial year to between €1.7 billion and €2 billion, compared with an earlier range of €1.7 billion to €2.2 billion.

It also confirmed capacity growth for the year was expected to be flat as it posted a €1.4 billion operating profit for its third quarter, which is usually the most profitable for European airlines because it includes the peak summer season.

That compared with a company-compiled analyst projection of €1.37 billion.

Chief Financial Officer Till Streichert said full-year operating profit would depend on demand, fuel costs and the performance of Lufthansa Cargo in the fourth quarter.

The group said it saw considerable demand in its premium segment, reflecting a trend that major network carriers have flagged. It added that traffic to Asia and North America was also strong, while passengers were continuing to book closer to their travel date with higher fares, helping to drive resilience.

"The better-than-expected Q3 performance and continued Q4 momentum should lead to low single digits forecast upgrades," Goodbody analyst Dudley Shanley said in a note.

($1 = 0.8937 euros)

(Reporting by Joanna Plucinska; Editing by Jamie Freed, Alexander Smith and Mark Potter)