The timing could hardly be more awkward. Just as Lufthansa rolls out free Starlink satellite Wi-Fi on its first commercial flight and expands its onboard catering range under the “Onboard Delights” banner, the group is grappling with a profit outlook that has already been slashed once and may not be out of the woods yet.
The Frankfurt-based carrier completed its inaugural Starlink-equipped flight last Wednesday, offering complimentary high-speed internet to Miles & More and Travel ID members. Within 24 hours, the company confirmed plans to retrofit up to ten more A320-family aircraft with the satellite connectivity before year-end, building on a rollout that began in early August. The premium-service offensive is clearly aimed at loyalty — but it lands at a moment when the core business is bleeding altitude.
The Numbers Beneath the Surface
Lufthansa’s second-quarter adjusted EBIT came in at €383 million, less than half the €870 million posted a year earlier. The margin collapsed to 3.4 percent from 8.4 percent. More alarming still, the flagship Lufthansa Airlines brand swung to a negative adjusted EBIT of minus €37 million, against a positive €247 million in the prior-year period.
Management has already responded by cutting its 2026 adjusted EBIT guidance to a range of €1.7 billion to €2.2 billion, having previously signaled a figure above €1.96 billion. The profit warning landed on August 4, and the stock has shed roughly 5.8 percent since. The question now is no longer whether 2026 will disappoint — that is settled — but whether the group can fix its cost structure in time for 2027.
External shocks are doing much of the damage. Fuel price volatility alone added around €750 million in costs, while strikes contributed another €150 million. Neither is fully within management’s control. What investors want to see is whether Lufthansa can trim its cost base independent of those factors, particularly through the decision to hold capacity growth flat in 2026 rather than the 2 percent previously planned.
Analysts Split on the Path Forward
The sell-side is divided on how this plays out. Barclays cut its price target to €7.50 from €7.75 last Wednesday, keeping an “Underweight” rating — the most bearish stance among recently active houses. The bank reportedly views even the reduced 2026 EBIT target as too optimistic and has not ruled out another downgrade.
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Bernstein, by contrast, struck a more measured tone a day later, maintaining “Market-Perform” with a €9 price target. The €1.50 gap between the two targets underscores just how wide the uncertainty band has become.
What Could Turn the Tide
For the bulls, the counter-arguments are tangible. Lufthansa Cargo and Lufthansa Technik delivered EBIT of €116 million and €157 million respectively, providing a stabilizing counterweight to the weak passenger operations. The group’s liquidity position of €10.7 billion offers ample headroom to fund structural investments — including equipping up to 850 aircraft with Starlink by 2029 — without straining the balance sheet.
The ITA Airways acquisition is another potential catalyst. Lufthansa announced in May its option to raise its stake from 41 percent to 90 percent for roughly €325 million, with completion expected in the first quarter of 2027, subject to regulatory approvals. If the integration proceeds smoothly, the Italian carrier could open new revenue streams from 2027 onward — a scenario in which the current share price weakness looks overdone.
The Bear Case Has Teeth
Skeptics point to increasingly short-term booking behavior, which erodes Lufthansa’s pricing power. There is also an operational wildcard: an incident in Munich about a week ago, in which an Airbus A380 touched down early and damaged runway lighting, is under investigation by the German federal aviation accident authority. All 351 passengers landed safely, but any adverse findings could bring additional costs or regulatory scrutiny.
Chart technicians note the stock is trading well below its 50-day moving average — €8.05 at the time of writing, against a 50-day level of €8.89 — reflecting a damaged short-term trend. The shares have fallen 10 percent over the past month and sit 22 percent below their 52-week high of €10.27 reached in July. Year-to-date, the stock is down 4.2 percent.
A Waiting Game Until 2027
With the next earnings season still months away, the near-term catalysts are thin. The completion of the ITA transaction in Q1 2027 looms as the next concrete milestone, assuming regulators sign off. Until then, Lufthansa’s equity remains a bet on management’s ability to deliver a cost turnaround — a wager that requires patience, a tolerance for volatility, and a belief that the premium-service investments will eventually pay for themselves.
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