I don’t ordinarily cover the financial results of the major European airline groups, because, well… there are only so many hours in the day. However, they are often interesting, and that includes the 2025 Lufthansa Group financial results that have just been released. In this post, I’d like to focus on the one aspect of these results that I find to be most noteworthy.
Lufthansa Group margins range from 0.9% to 9.3%
For the 2025 financial year, Lufthansa Group is promoting how it achieved record revenue, though profitability is down slightly compared to 2024. That’s not too surprising when you look at the industry big picture.
But what I find most interesting is how each individual airline has contributed to Lufthansa Group’s profitability. In the presentation for investors, the airline group breaks down how each of the subsidiaries contributed to Lufthansa Group’s bottom line.
What’s perhaps most surprising is just how massively the margins vary. Going from most profitable to least profitable airline in the group (based on margins):
- SWISS had a €600 million profit on €6.48 billion in revenue, for a 9.3% return
- Eurowings had a €132 million profit on €3.08 billion in revenue, for a 4.3% margin
- Austrian had an €81 million profit on €2.54 billion in revenue, for a 3.2% margin
- Brussels had a €28 million profit on €1.65 billion in revenue, for a 1.7% margin
- Lufthansa had a €148 million profit on €17.1 billion in revenue, for a 0.9% margin
As you can see, “flagship” Lufthansa is the lowest margin airline in Lufthansa Group. SWISS is by far the most profitable, and it’s not even close, while Brussels is nearly 2x as profitable as Lufthansa, Austrian is more than 3x as profitable, and Eurowings is almost 5x as profitable.
Will Lufthansa finally be able to improve its margins?
Lufthansa has sort of had the perfect storm of issues in recent years, which have contributed to the carrier’s lack of profitability:
- The rollout of the new Allegris cabins has been a real challenge, and has been much more drawn out and costly than planned (and that says nothing of the actual money spent on the new cabins, plus the lack of density)
- Lufthansa’s fleet renewal was so heavily centered around the Boeing 777-9, but with that delayed by seven years and counting, the airline has kept around more old and inefficient aircraft
- Just generally, it feels like Lufthansa has kind of lost its groove when it comes to establishing competitive advantages, especially in comparison to carriers like Air France, which have nicely improved their product in recent years
Even so, it’s kind of wild to look at the massive profitability divide between Lufthansa and SWISS. You’d almost think there would be merit to Lufthansa Group shifting more resources to SWISS, though I also suspect the key to maintaining those margins is not flooding the market too much.
The irony is that Lufthansa Group is increasingly trying to centralize management functions in Frankfurt, so that individual airlines have less autonomy. All the airlines that previously had some autonomy had better margins than Lufthansa, so that seems like a questionable strategy.
Lufthansa management has been very critical about its lack of profitability, with CEO Jens Ritter even claiming that “without structural changes, there will be no prospects for Lufthansa Airlines.” At the same time, it always seems like this “we’re not profitable enough” line is used in order to increasingly outsource functions to subsidiaries with lower labor costs.
Anyway, Lufthansa Group management seems to think that a turnaround is right around the corner, and that 2026 will be the carrier’s year of success. We’ll see how that all plays out… I’m not holding my breath.
Bottom line
Lufthansa Group has reported its 2025 financial results, and what stands out the most is the variance in profitability between airlines in the group. At most airline groups, the “flagship” carrier is the one that’s also most profitable, but it’s exactly the opposite at Lufthansa Group.
Lufthansa is the lowest margin airline in the group, with a 0.9% margin. Meanwhile SWISS is on the other end of the spectrum, with a 9.3% margin. Lufthansa Group management insists that a new era for Lufthansa is right around the corner, though the airline certainly has a lot of ground to make up!
