DAVY VIEW

Lufthansa is refining its earnings forecast to €1.7-2.0bn adjusted EBIT (previously €1.7-2.2bn, consensus: €1,723m, Davy: €1,996m). Where in the range will depend not only on fuel costs and demand, but also on Lufthansa Cargo’s earnings performance in the fourth quarter. The Q3 fuel recapture rate of ~85% for network airlines mitigates fuel headwind, while higher jet fuel prices raise Q4 ambition. The building blocks from 2027 include mid-single-digit ASK growth (focus on intercontinental, with continental flat). This is low-single digits adjusted for strike, Middle East and CityLine closure. Network airlines’ CASK reduction versus the prior year, with the fuel bill above previous year’s level (including hedge ratio of >60% for passenger airlines).