Company Reports

Lufthansa is a diversified aviation group. Its network airlines—Lufthansa German Airlines, SWISS, Austrian Airlines, and Brussels Airlines—operate hubs in Frankfurt, Munich, Zurich, Vienna, and Brussels. The group also owns Eurowings, Lufthansa Cargo, and Lufthansa Technik. It holds 41% of ITA Airways and exercised its option to acquire another 49% for EUR 325 million, with closing expected in the first quarter of 2027 subject to regulatory approval.

Lufthansa’s second-quarter adjusted EBIT fell 56% to EUR 383 million, 4% below consensus, as fuel and strikes outweighed stronger fares. Management downgraded profit guidance from significantly above 2025 to EUR 1.7 billion-EUR 2.2 billion; adjusted free cash flow remains EUR 900 million.

Lufthansa’s first‑quarter 2026 revenue rose 7.6% to EUR 8.7 billion on flat capacity, adjusted EBIT improved by EUR 110 million to negative EUR 612 million, and adjusted free cash flow reached EUR 1.38 billion.

Lufthansa is a European network carrier that uses a hub-and-spoke model, with major hubs in Frankfurt, Munich, Vienna, and Zurich.

Lufthansa reported 2025 revenue of EUR 39.6 billion, up 5%, with adjusted EBIT of EUR 2.0 billion and a margin of 4.9%. Adjusted free cash flow rose to EUR 1.2 billion as operational disruption costs fell and fuel prices eased.

Lufthansa posted adjusted EBIT of EUR 1.3 billion, flat year on year, on EUR 11.2 billion revenue with 3% capacity growth. Unit revenue fell 2.2% but were stable ex-foreign exchange. Cargo EBIT was EUR 49 million, while Technik grew 10% despite tariff headwinds.

Lufthansa reported half-year 2025 adjusted EBIT of EUR 871 million, up 27% year on year, with margin improving to 8.4%. Passenger demand remained resilient on long-haul and premium routes, while cargo and Technik contributed over one-fourth of group EBIT. Full-year guidance was reaffirmed.

Lufthansa is a European network carrier utilizing a hub-and-spoke model with major hubs in Frankfurt, Munich, Vienna, and Zurich.

No-moat Lufthansa reported a solid first-quarter performance, with group revenues rising 9.9% year-on-year to EUR 8.0 billion. Growth was supported by resilient passenger demand, a strong contribution from Lufthansa Technik, and a recovery in air cargo yields.

No-moat Lufthansa reported record revenue of EUR 37.6 billion in 2024, up 6% year on year driven by increased capacity, but profitability weakened as adjusted EBIT declined to EUR 1.6 billion (4.4% margin versus 7.6% in 2023). Profitability was affected by EUR 450 million in strike-related costs, industry-wide capacity expansion that pressured yields (2.6% decline year on year), and rising operational costs in Germany, including labor and flight compensation expenses. Delayed aircraft deliveries further weighed on efficiency, requiring older aircraft to remain in service, increasing maintenance costs.

We Initiate coverage of Lufthansa with a no-moat rating and a fair value estimate of EUR 6.5, supported by robust travel demand, gradual capacity recovery, and enhanced operational efficiency, leading to improved profitability compared with average prepandemic levels.

Lufthansa is a European network carrier utilizing a hub-and-spoke model with major hubs in Frankfurt, Munich, Vienna, and Zurich.

We are dropping coverage of Deutsche Lufthansa. We provide broad coverage of more than 1,500 companies globally and periodically adjust our coverage according to investor interest and staffing.

Deutsche Lufthansa returned to positive EBIT of EUR 393 million in the second quarter, for the first time since the start of the coronavirus pandemic, driven by strong results from the cargo and maintenance businesses and narrowing losses for its passenger airlines. The number of passengers flown in the quarter of 29 million reached 74% of 2019 levels. The group reinstated full-year guidance and is expecting 2022 EBIT to be above EUR 500 million, while free cash flows should be significantly positive. We maintain our fair value estimate of EUR 11 per share, with shares trading in discount territory.

Deutsche Lufthansa is a European network carrier utilizing a hub-and-spoke model. Its major hubs are Frankfurt, Munich, Vienna, and Zurich and flies under the Lufthansa, Swiss Air, and Austrian Airlines brands. As a result of the coronavirus downturn the group embarked on a cost and fleet restructuring program, which will see it emerge as a smaller business. Despite the smaller size we expect the group to become a more profitable business as a result of structural cost reductions and fleet efficiencies and forecast EBIT growth of 8.5% per year to 2026 from 2019 precoronavirus levels. However, we remain negative about the prospects for shareholder value creation due to the high level of indebtedness.

Deutsche Lufthansa reported strong cash flows aided by advanced booking as the group is approaching EBITDA breakeven. Bookings are looking strong, reaching 2019 levels, while the group echoed a lot of Air France-KLM’s comments around the definite recovery of corporate travel and rising yields. Capacity in the first quarter was 57.5% of 2019 levels and is expected to reach 85% by summer on the back of strong demand. Lufthansa has hedged 63% of its fuel exposure for 2022 and will pass on excess cost inflation to customers. No financial guidance has been provided for 2022, but management maintains its 8% EBIT margin target by 2024. We make no changes to our EUR 8.15 fair value estimate. The shares appear cheap, but we caution against the extreme uncertainty due to the company's high debt levels.

No-moat Lufthansa narrowed its full-year 2021 adjusted EBIT loss to EUR 1.8 billion, from EUR 5.2 billion a year ago, as traffic recovered and the benefits of the cost-reduction programme filters through. The group expects a strong recovery in 2022 but failed to provide financial guidance due to the uncertainty stemming from the war in Ukraine. Russian airspace has been closed to European airlines, which will affect the group’s Asian destinations as it needs to reroute, leading to higher costs. Roughly 20%-25% of precoronavirus revenue was generated from Asian destinations, but we believe the impact will be more on the recovery than current sales as Asian markets still remain restricted due to COVID-19 measures. The group flew 40% of 2019 capacity in 2021 and expects to fly around 70% in 2022 with summer capacity reaching 85% of pre-COVID-19 levels. The industry faces cost pressures from higher airport charges and sharply rising fuel costs. Lufthansa has hedged 63% of its 2022 at 30% below the current spot price of $110, which will mitigate some of the pressures.

Germany’s boost in defense spending, announced Feb. 27, will benefit most European defense contractors and could lead to multiyear increases in the growth outlook for these companies. While it is early days and very difficult to quantify the exact impact, we expect to make positive adjustments to our defense coverage. Of the pure-play defense names, narrow-moat Thales, Dassault, and Leonardo trade at discounts to our fair value estimates while wide-moat BAE Systems trades at a premium. We don’t believe our revisions will change this ranking by much, and our preference is for Thales and Dassault. Despite the impact from a demand and cost perspective on the airline and commercial aerospace companies we cover, we don’t foresee any structural long-term changes to their prospects and as such don’t anticipate any major changes to our fair value estimates. We maintain our preference for wide-moat Safran and no-moat Wizz Air under our aerospace and airline coverage, respectively.

No-moat Deutsche Lufthansa returned to profitability on an operating basis as traffic in the third quarter recovered due to the easing of travel restrictions across Europe and the positive contribution from the group’s cargo business. Group-adjusted EBIT (including restructuring costs of EUR 255 million) equated to EUR 17 million in the quarter, a stark improvement from the EUR 1.2 billion loss in the same period last year as well as a EUR 969 improvement against the second quarter. The group raised EUR 2.1 billion in the quarter, via a rights issue, which brings pro-forma liquidity to EUR 8.5 billion after accounting for the repayment of EUR 5.5 billion in state aid and is more than sufficient to support the ongoing recovery. We maintain our fair value estimate of EUR 8.15 and reiterate our extreme uncertainty rating due to potential shareholder equity value destruction as a result of the group’s high indebtedness.

Deutsche Lufthansa is a European network carrier utilizing a hub-and-spoke model. Its major hubs are Frankfurt, Munich, Vienna and Zurich and flies under the Lufthansa, Swiss Air and Austrian Airlines brands. As a result of the coronavirus downturn the group is embarking on a cost and fleet restructuring program, which will see it emerge as a smaller business. Despite the smaller size we expect the group to become a more profitable business as a result of structural cost reductions and fleet efficiencies and forecast EBIT growth of 8.5% per year to 2025 from 2019 precoronavirus levels. However, we remain negative about the prospects for shareholder value creation due to the high level of indebtedness.