Lufthansa said Wednesday that the Iran war will raise its 2026 fuel bill by €1.7 billion to approximately €8.9 billion, nearly 20% higher than previously estimated, as the near-total closure of the Strait of Hormuz sends jet fuel costs surging across the globe.
Narrowed Losses, Record Revenue
Europe’s largest airline group reported a narrowed first-quarter net loss of €665 million, down from €885 million a year earlier, while revenue rose 8% to a record €8.7 billion for the period. The adjusted operating loss improved by €110 million to €612 million, beating analyst expectations.
Finance chief Till Streichert said the cost increase was “driven almost entirely by the price escalation since the start of the war in Iran, and this clearly makes fuel the single most relevant cost headwind for the remainder of the year”. The company said approximately 80% of its fuel needs are hedged through derivatives, but the unprecedented price spike still leaves a substantial unhedged exposure.
Lufthansa maintained its full-year guidance for a higher adjusted operating profit than in 2025, saying it would offset the fuel burden through fare increases, cost cuts, and network adjustments. The group has already axed 20,000 flights through October.
A Global Supply Crisis
The conflict between the U.S. and Israel against Iran, which began on February 28, has effectively halted traffic through the Strait of Hormuz, a passage that previously carried roughly 20% of global oil trade. Jet fuel prices have doubled since the war’s start, according to NPR, with the International Air Transport Association reporting a 103% surge by the end of March.
A Goldman Sachs research report estimates Europe’s jet fuel inventories will fall below the International Energy Agency’s critical 23-day shortage threshold sometime in June. Italy confirmed its reserves would last only until the end of May, while France, Germany, Australia, and other nations are urgently monitoring dwindling supplies.
Industry-Wide Fallout
Lufthansa is far from alone in absorbing the shock. American Airlines estimated its 2026 fuel expenses at $4 billion above last year, while Delta said it faces a $2 billion spike in fuel costs for the second quarter alone. Budget carrier Spirit Airlines shut down operations after government bailout talks collapsed.
Claudio Galimberti, Rystad Energy’s chief economist, told Fortune that even a peace deal would not bring immediate relief. “Unless we normalize Hormuz, there will be a shortage at some point in Asia. Europe has this additional buffer with the refineries that affords them a few more weeks, which is vital,” he said, adding: “We’re still kind of sleepwalking into this approaching disaster”.
