Lufthansa Steers Toward 2025 With Confidence Amid Trade Tensions
Berlin, April 29, 2025 — Lufthansa, Europe’s largest airline group, has reaffirmed its 2025 outlook, signaling continued recovery and strategic stability after years of turbulence. Yet beneath the surface of strong revenue projections and fleet modernization lies a growing unease about the global trading environment — one Lufthansa cannot afford to ignore.
At its annual general meeting in Berlin, Lufthansa Group presented shareholders with a forward-looking assessment of its financial, operational, and geopolitical position. CEO Carsten Spohr praised the company’s performance during the first quarter of 2025 but acknowledged the potential for disruption due to shifting global trade policies.
“The aviation industry thrives on openness, on the free movement of people and goods,” Spohr said. “Any breakdown in global trade — whether through tariffs, sanctions, or political fallout — threatens our ecosystem. Lufthansa is prepared, but we are not invincible.”
Soaring Numbers, Grounded Concerns
According to Lufthansa’s latest earnings guidance, the airline expects a full-year revenue of approximately €41 billion, nearly 10% higher than 2024. The recovery is driven by pent-up leisure demand, a rebound in business travel, and solid contributions from subsidiaries including SWISS, Austrian Airlines, Brussels Airlines, and Eurowings.
Passenger volumes are expected to reach 95% of 2019 levels by Q4, and Lufthansa Cargo — long a reliable performer — is projected to contribute over €3 billion in annual revenue. The company also highlighted improved operating efficiency and lowered unit costs, which allowed it to raise its adjusted EBIT margin target to 9% for 2025.
However, as Spohr warned, these numbers might mean little if international trade routes and diplomatic agreements begin to unravel.
Global Trade Tensions: A Cloud Over the Skies
For months, airline executives across the globe have watched nervously as trade relations between major economies teeter on the edge. The European Union has proposed new tariffs on certain Chinese goods in retaliation for perceived subsidies, including a possible increase in import duties on Chinese-made components used in aircraft assembly and maintenance.
China, in response, has hinted at reciprocal tariffs that could affect European-made aircraft and industrial machinery — a serious concern for Lufthansa, whose fleet modernization relies heavily on Airbus.
Adding fuel to the fire, the United States has signaled a potential shift in its trade stance under election-year pressure. Protectionist voices in Congress are calling for renewed scrutiny of European aviation subsidies, and President Biden has not ruled out the possibility of imposing new import regulations on European aerospace exports if negotiations falter.
“All of this affects the cost of doing business,” said Lufthansa CFO Remco Steenbergen. “If we’re suddenly hit with additional import duties, our procurement strategy, our cost structure — even our route planning — could be forced to adapt overnight.”
Resilience Through Diversification
To mitigate these looming threats, Lufthansa is doubling down on geographic and operational diversification. The group’s decision to shift more of its maintenance and component sourcing to regions outside the EU — particularly Southeast Asia, Latin America, and the Middle East — is no longer just about cost, but about political risk management.
Lufthansa Technik, the group’s engineering arm, recently signed a multi-year contract to open a new maintenance center in Kuala Lumpur, Malaysia. This facility, scheduled to become operational in early 2026, will handle a significant portion of wide-body aircraft repairs and component services for Lufthansa and its partners.
Meanwhile, the group is expanding its cargo presence in non-EU markets, including major logistics hubs in Nairobi, Santiago, and Ho Chi Minh City, to reduce its dependency on traditional transatlantic and intra-EU freight lanes.
“We must be global not only in our network but in our resilience,” said Spohr. “We are no longer living in a world where European-centric logistics are sufficient. We need to be agile in procurement, logistics, and labor planning.”
Digital Infrastructure as a Defensive Strategy
One of Lufthansa’s less publicized but critical defenses against trade fallout is its investment in digital infrastructure. The airline is using AI-driven systems to forecast potential disruptions — not only from weather or strikes, but also from changes in tariffs, import/export restrictions, or regional supply shortages.
Lufthansa’s new “Trade Radar” platform, developed in partnership with SAP and Palantir, compiles global trade data, sanctions announcements, and political indicators to predict impact on routes, costs, and fleet operations up to three months in advance.
“This is no longer just a logistics problem,” said Christina Foerster, Lufthansa’s Chief Customer Officer. “It’s a customer service issue. If trade tensions mean we can’t get spare parts to Paris or Mumbai in time, flights will be delayed, customers will be unhappy, and we’ll suffer financially. Our Trade Radar gives us vital lead time.”
The system has already proven its worth. In February 2025, it flagged a possible bottleneck in cargo shipments from Taiwan due to renewed airspace restrictions. Lufthansa adjusted its schedules and cargo plans accordingly, avoiding service disruption.
Fuel and SAF Procurement: A Geopolitical Game
Fuel procurement remains one of Lufthansa’s most sensitive exposure points in a fracturing world. With traditional suppliers in the Middle East facing both conflict and volatility, Lufthansa is increasingly turning to alternative sources for both jet fuel and Sustainable Aviation Fuel (SAF).
Earlier this month, Lufthansa signed a groundbreaking deal with Saudi Arabia’s new state-backed SAF venture, AlNour Aviation BioFuels. The agreement will supply 150,000 tonnes of SAF annually by 2027, marking a major step toward Lufthansa’s target of 5% SAF usage by 2025 and 10% by 2027.
But the SAF market itself is becoming a geopolitical battleground. The EU’s proposed carbon border tax could disrupt supply lines from the U.S. and Asia, while Chinese SAF producers face scrutiny over environmental reporting standards.
“We welcome the expansion of SAF, but we must be cautious not to create a new kind of energy dependency,” warned Steenbergen. “We need a broad mix of suppliers, not just politically convenient ones.”
Labor Unions and Domestic Headwinds
While Lufthansa’s gaze is fixed on global risks, it also faces tensions at home. Labor unions representing pilots, cabin crew, and ground personnel have raised concerns about cost-cutting, inflation, and management bonuses.
Ver.di, Germany’s largest trade union, accused Lufthansa of “corporate amnesia” for ignoring the sacrifices made by workers during the pandemic. The union is demanding a 9% wage increase across the board and better job security guarantees.
Meanwhile, climate activists in Germany have called for Lufthansa to stop expanding domestic routes and instead support rail alternatives. In a recent protest outside Munich Airport, activists unfurled banners reading, “Ground short-haul flights — the climate can’t wait!”
These pressures come as Lufthansa navigates upcoming government reviews of its post-bailout obligations. Though the German government sold off most of its 2020 bailout stake, regulators remain vocal about environmental compliance and consumer protection.
Corporate Diplomacy: A New Frontier
In response to these multidimensional risks, Lufthansa has quietly expanded its government relations team. The group is now active in Brussels, Washington, Beijing, and New Delhi, lobbying for open skies agreements, trade protections, and regulatory harmonization.
“We’re not just flying planes — we’re engaging in diplomacy,” said a Lufthansa executive familiar with the efforts. “Every trade pact, every aviation agreement, is now a potential threat or opportunity. We have to be at the table.”
Sources say Lufthansa is particularly active in shaping the EU’s position in ongoing talks with the Biden administration about revising the 2007 EU–U.S. Open Skies Agreement. One issue at stake: whether European airlines will continue to enjoy equal access to American airport slots and routes under new U.S. economic nationalist pressures.
The Bigger Picture: Strategic Patience
Despite all the potential obstacles, Lufthansa is urging stakeholders to take the long view. Spohr reminded investors that the airline weathered worse conditions during the COVID-19 pandemic, the 2008 financial crisis, and the Gulf War.
“Resilience is built in layers,” Spohr said. “We have learned from every crisis. We are more agile, more diversified, and more data-driven than ever before. The threats ahead are real — but we will navigate them.”
Lufthansa’s leadership appears unified in that belief. The board has approved an increase in R&D spending to improve aircraft efficiency, digital ticketing platforms, and AI-driven route optimization. The airline is also exploring partnerships with academic institutions to better understand long-term climate, trade, and consumer behavior trends.
Closing Thoughts
As Lufthansa enters a critical juncture, it does so with eyes wide open. Its 2025 outlook is strong, but fragile. One wrong step — a breakdown in EU-China trade, an American shift toward protectionism, or a supply shock in jet fuel — could derail its progress.
But few in the industry doubt Lufthansa’s ability to adapt. It has restructured, diversified, and embraced technology. It has made peace with unions, trimmed its debt, and regained market share. And perhaps most critically, it has begun to think not just as an airline, but as a multinational company deeply entangled in the world’s political and economic machinery.
In 2025, that may be the most important adaptation of all.