Lufthansa Feedback from the J.P. Morgan European Industrials Conference

Research evidence excerpt

Lufthansa Feedback from the J.P. Morgan European Industrials Conference

and so is benefitting from outsized moves down in jet; the Olivia Petronilho - Specialist Sales -

European Consumer

opposite of the start of the crisis). Jet fuel availability is now largely secured

(44-20) 3493-3709

until early-September due to lower industry capacity, refineries increasing jet olivia.b.petronilho@jpmorgan.com

production, and increased imports from the US.

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• (2) Pricing trends remain solid: 2026E EBIT guidance required +5-6%

Network RASK growth to offset the c€1.7bn additional fuel costs. March was

+12% and current trends remain supportive. April was impacted by strikes;

however, management are pleased with May-June pricing. APAC and Africa

RASK were up “teens” % versus prior year in May despite Middle Eastern

capacity returning. Lufthansa pivoted to a yield-led strategy at the start of the

year which is working now, but it remains to be seen if July-August late

bookings are realised at higher yields. Bookings curves are shorter, particularly

in the economy cabin (likely related to consumer sentiment and concerns on jet

fuel availability); however, premium demand remains strong. Lufthansa has

seen an acceleration in bookings week-on-week as the conflict has reached a

resolution and with improved messaging on jet fuel supplies.

• (3) Headroom to 2026E EBIT guidance: As stated at the Q1 results, earlier

“significant headroom” to the 2026E EBIT guidance had been eroded by

strikes (c€200m total impact in Q2) and the increase in fuel as of early May.

Current pricing trends remain solid whilst fuel costs have come down; in our

view this would suggest that headroom to the EBIT guidance has increased

again if marking to market now. However, management are currently choosing