Lufthansa Group's 2025 revenue hits a record, but core airline business remains almost flat

Investing.com - Lufthansa Group in Germany achieved a record high in annual revenue for 2025, but operating profit margin remained thin, with its flagship airline nearly breaking even. Management did not provide specific profit guidance for 2026, citing uncertainties in the Middle East region.

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The German airline group announced full-year revenue of €39.6 billion, up 5% year-over-year, with operating profit increasing 25% to €2 billion. The operating profit margin rose from 4.4% in 2024 to 4.9%. Net profit after consolidation decreased from €1.4 billion to €1.3 billion, affected by the impact of loss carryforwards.

Profit improvement was largely due to favorable factors unlikely to recur at the same scale: a €500 million savings from lower jet fuel prices and a weaker US dollar, and a €362 million reduction in extraordinary flight costs compared to 2024. These positive changes totaled nearly €860 million, based on a profit base of €2 billion.

Lufthansa’s core brand, Lufthansa Airlines, despite implementing a dedicated transformation plan, achieved an operating profit margin of only 0.9%. Non-core business units contributed to profitability: Lufthansa Cargo’s operating profit grew 29% to €324 million, and Lufthansa Technik remained nearly flat at €603 million despite US tariff pressures. The newly integrated Italian airline contributed €90 million.

The passenger airline carried a total of 135 million passengers, with a record-breaking seat occupancy rate of 83.2%. Excluding currency effects, yield declined by 1.3%, but a 15% growth in ancillary revenue offset this, keeping unit revenue roughly stable. Full-year unit costs increased by 1.9%, but the growth narrowed to break-even by the fourth quarter.

Chief Financial Officer Tilo Strätz said the group expects “significant growth” in profits in 2026 but did not specify a figure. Regarding the Middle East, he stated: “The crisis there makes it more difficult to provide profit forecasts at this time.”

CEO Carsten Spohr highlighted structural risks from the concentration of Gulf hub traffic. He noted: “The large-scale concentration of global traffic at Gulf hubs is increasingly proving to be a geopolitical Achilles’ heel.”

Adjusted free cash flow increased from €840 million to €1.2 billion. The group proposed a €0.33 per share dividend, a 10% increase, with a payout ratio of 30%.

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