Frankfurt, May 26, 2026, 21:02 CEST
Lufthansa’s new €750 million euro bond due 2032 was seen at 100.81 on Tuesday, just above its 99.88 issue price, according to market data. The bond, which pays a 4.125% coupon and matures on Jan. 27, 2032, comes as the German airline contends with higher fuel costs.
Lufthansa’s timing here is key with kerosene prices putting pressure on its plan for 2026. According to the company’s investor presentation, current forward curves suggest the 2026 fuel bill will rise by €1.7 billion after hedging. Lufthansa said 78% of its full-year fuel requirements are already hedged with contracts designed to curb exposure to price swings.
Lufthansa went ahead with the sale after investors asked for a senior unsecured bond with a maturity of around 5.7 years. This type of debt isn’t tied to assets but takes priority over subordinated debt. The market chatter was that proceeds would be used for things like refinancing and other general corporate purposes.
The new senior unsecured bond, ISIN XS3376351055, showed up in public new-issue data with ratings of BBB-/Baa3/BBB-, just above junk, and priced at 110 basis points over mid-swaps. One basis point equals 0.01%; mid-swaps set the euro bond benchmark.
Lufthansa CEO Carsten Spohr said the Middle East crisis and higher fuel prices are “enormous challenges” for the airline, but pointed to the company’s fuel hedges and its multi-hub network as support. CFO Till Streichert said he still expects 2026 results to come in well above last year, so long as there aren’t “fuel supply bottlenecks or further strikes.” Lufthansa Group Newsroom
Lufthansa is sticking with its outlook for adjusted operating profit well above the €1.96 billion it made in 2025. The airline’s adjusted operating loss for the first quarter came in at €612 million, smaller than last year’s €722 million loss and better than analysts had expected, according to a company survey.
The bond leaves operating risk in place. AP said Lufthansa would drop 20,000 short-haul flights through October, mainly at Frankfurt and Munich, aiming to cut around 40,000 metric tons of jet fuel. Other airlines such as Delta, United, British Airways and Air France-KLM also canceled scheduled May flights, according to Cirium data.
Airline issuers are finding the market open. IAG priced two €500 million senior unsecured bonds on May 20, with coupons at 3.875% and 4.5%. Settlement is set for around May 28.
Airline bond buyers seem to be shrugging off near-term oil price swings and are thinking longer-term, GlobalCapital reported May 22. The note followed Lufthansa’s latest euro bond sale and came as carriers pushed ahead with fresh deals while fuel prices stayed choppy.
Lufthansa now faces what comes after launch: the bond needs to hold up once settled, and ticket sales, routes and cost cuts have to match fuel expenses. There’s still some flexibility, but another shock would be harder to handle.
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