Austrian Airlines hit by Middle East crisis as first-half loss widens to €93 million

Austrian Airlines reported a first-half Adjusted EBIT loss of €93 million for 2026, as soaring fuel prices and route suspensions linked to the Middle East conflict weighed heavily on the carrier’s financial performance despite continued strong passenger demand.

The Lufthansa Group airline said its result deteriorated by €50 million compared with the first half of 2025. Fuel costs alone increased by more than €60 million year-on-year, despite extensive hedging, while the temporary suspension of flights to Amman, Erbil, Tel Aviv and Tehran generated an additional double-digit million-euro earnings impact.

Chief Executive Officer Annette Mann said the conflict involving Iran had significantly affected the airline.

“The war involving Iran has hit us hard through, in some cases, extremely sharp increases in jet fuel costs as well as route cancellations that became necessary. Higher ticket prices were only able to offset part of the financial impact.”

Revenue and passenger numbers increase

Despite the challenging environment, Austrian Airlines increased revenue by 4% to €1.22 billion, while carrying 6.96 million passengers, up 6% year-on-year.

Capacity remained broadly unchanged, but stronger demand—particularly from late summer bookings—helped increase the load factor from 77.2% to 80.6%. Operational reliability also remained high, with 98.8% of flights operating as scheduled.

The airline successfully redeployed capacity released by the suspension of Middle Eastern routes, adding around 800 extra flights to popular leisure destinations including Palma de Mallorca, Dubrovnik, Barcelona, Nice and Málaga. During the summer season, Austrian also launched new services to Ponta Delgada, Ohrid, Bergen, Mytilini, Bastia, Bilbao and Alicante, expanding its network to more than 120 destinations.

Winter network to be reduced

To improve profitability, Austrian Airlines will make several changes to its winter 2026/27 schedule.

The loss-making Vienna–Graz route will be discontinued after years of weak financial performance. Graz will continue to be served through Lufthansa Group hubs, with 46 weekly flights to Frankfurt, Munich and Zurich, while passengers will also retain access to Austrian’s network via the AIRail rail service to Vienna.

The airline will also temporarily suspend flights to Tbilisi, Keflavík and Porto, while eliminating overnight aircraft and crew positioning at Klagenfurt, Copenhagen, Warsaw and Kraków as part of wider cost-saving measures.

Fleet modernisation continues

Despite the financial pressures, Austrian Airlines confirmed it will continue investing in its long-term fleet renewal programme.

The airline expects to receive two additional Boeing 787-9 Dreamliners before the end of the year, increasing its Dreamliner fleet to five aircraft. A new Airbus A320neo, equipped with Starlink in-flight connectivity, will also join the fleet this autumn, with Starlink planned for rollout across the fleet over the coming years.

At the same time, Austrian is continuing the retirement of its Embraer fleet. Four aircraft have already left the fleet in 2026, with the airline aiming to operate an all-Airbus A320-family short-haul fleet and an all-Boeing 787 long-haul fleet from 2029.

Further customer-focused investments include new premium lounges at Vienna Airport, scheduled to open in the second quarter of 2027, an upgraded Premium Economy product from next winter and the introduction of new staff uniforms from 2028.

Despite the difficult first half, Austrian Airlines remains confident of returning to profitability for the full year through a combination of targeted fare increases, continued efficiency measures and strong summer demand.