The Japan Times - Mideast war is heightening uncertainty, Lufthansa warns

The war -- which began last weekend with US-Israeli attacks on Iran, triggering retaliatory strikes from the Islamic republic -- has caused the biggest disruption to air travel since the Covid pandemic.

With airspace closed and transit hubs in the Gulf disrupted, Lufthansa also said it was scrambling to put on extra long-haul flights as demand surges from passengers looking for alternative routes.

"The war in the Middle East proves once again how exposed air traffic is and how vulnerable it remains, even though the industry is now more resilient to crises than it used to be," Lufthansa CEO Carsten Spohr said, as the group announced its 2025 results.

"The massive concentration of global traffic flows via the Gulf hubs is increasingly proving to be a geopolitical Achilles' heel."

On its outlook for this year, the group -- which operates Eurowings, Austrian, Swiss and Brussels Airlines and has acquired a stake in Italy's ITA -- cautioned profit predictions were now more difficult.

"Developments in the Middle East and the associated geopolitical consequences for the global economy increase the medium- and long-term forecast uncertainty," said Lufthansa, which is Europe's biggest airline group by sales.

Talking to reporters later, Spohr said Lufthansa was seeing "an enormous increase" in demand for long-haul flights to Asia and Africa because if major disruption at hubs like Dubai and Doha.

"We are examining how we can respond to the situation by operating short-notice special flights," he said, adding that destinations would include Bangkok, Singapore and India.

"We don't have an unlimited number of aircraft... but will now deploy and schedule those that we can at short notice."

Lufthansa is also joining efforts to evacuate thousands of German tourists stranded in the Middle East by organising some flights to bring them home, the CEO said.

Another risk that Lufthansa flagged was "volatility" on oil markets as the conflict sends prices -- including of jet fuel -- sharply higher.

But chief financial officer Till Streichert played down the risk, saying the firm had a "solid hedging strategy" that should shield it from price fluctuations.

Before the outbreak of the war, airlines had been benefitting from relatively lower oil prices.

- Forecast-beating profits -

Widespread closures of airspace have brought back memories of the travel shutdowns during the pandemic, which led to Lufthansa being bailed out by the German government.

Announcing its annual results for 2025, the group reported a forecast-beating operating profit of 1.96 billion euros ($2.27 billion), around 20 percent higher than the previous year.

The news initially sent the group's shares up more than three percent in Frankfurt before they pulled back to trade around 0.5 percent higher.

Revenues rose five percent to 39.6 billion euros. The group's airlines carried 135 million passengers, up three percent from 2024.

The results were an improvement on 2024, when profits plummeted due to the impact of strikes, aircraft delivery delays and rising costs.

Lufthansa has described 2025 as a "transitional year" which has seen it push through a wide-ranging turnaround programme, particularly at its main carrier.

The group is cutting 4,000 jobs, mainly administrative roles in Germany.

The turnaround efforts were making progress, with the flagship carrier returning to profit, and Spohr stressed that it will remain a "top priority".

M.Fujitav--JT