Lufthansa Locks In Munich Hub for Three Decades as Kühne Tightens Grip

Lufthansa stock rises as billionaire Kühne increases stake to 20% and airline locks in Munich terminal deal until 2056, despite a wider Q1 loss and €1.7B fuel-cost headwind.

Logistics billionaire Klaus?Michael Kühne has cemented his influence at Lufthansa just as the airline secures its second?largest hub for the next 30 years. The group’s dual strategy — locking down infrastructure while a powerful anchor shareholder builds his stake — sent the stock higher on Wednesday, even as the carrier posted a seasonal loss and flagged a €1.7?billion fuel?cost headwind.

Munich Terminal Deal Secures Long?Run Capacity

Under a memorandum of understanding with airport operator FMG, Lufthansa will co?operate Munich’s Terminal?2 until 2056. Unlike its home market Frankfurt, where the airline is simply a customer, Lufthansa owns 40?% of the Munich building, giving it direct control over infrastructure. The centrepiece of the expansion is a so?called “T?stem” extension to the satellite terminal, due to open in the mid?2030s and add ten long?haul parking positions. Capacity at the hub will rise by as many as ten million passengers a year under current plans.

Q1 Loss Narrows as Cash Flow Surges

The long?term deal comes alongside a sharp improvement in first?quarter cash generation. Revenue climbed to €8.7?billion and the adjusted operating loss shrank by €110?million to €612?million — still a seasonal deficit but better than a year ago. Adjusted free cash flow jumped 65?% to €1.4?billion, while the group load factor reached nearly 82?% and unit revenues firmed up.

Maintenance arm Lufthansa Technik remained a reliable earnings contributor, posting revenue of €2.3?billion and an operating profit. Cargo also improved its result. In the passenger business, budget unit Eurowings lifted unit revenues by almost 7?% and has been aggressively expanding in Berlin, where the group now commands around 30?% market share as rivals retreat from German airports.

Costs Bite Hard at Home

Despite the operational improvement, the cost picture stays grim. Fuel expenses alone are expected to add €1.7?billion to the annual bill; Lufthansa has already hedged 80?% of its year’s needs to smooth out price swings. German airport taxes and fees have more than doubled in some cases since 2019, drawing sharp criticism from industry associations. Geopolitical tensions in the Middle East also threaten route planning.

Labour disruptions have taken their toll too: strikes in Frankfurt depressed passenger numbers by about 11?% in April. The group’s administrative cost?cutting programme and the integration of ITA Airways are seen as key levers to improve margins in the second half.

Share Price: One Year Up, Year?to?Date Down

The mix of a secured Munich hub and a rising stake from Kühne — whose holding company recently increased its position to 20?%, making him the top individual shareholder — resonated with the market. The stock closed at €7.90 on Wednesday, up 2.47?%. That gives a trailing twelve?month gain of roughly 17?%. Yet after earlier hovering around €7.71 during the same session, the shares sit below their 200?day moving average and have lost about 10?% since the start of the year. With a forward P/E of 7.3, the valuation remains moderate by European airline standards.

Management still expects full?year operating profit to comfortably exceed last year’s figure, but the near?term narrative remains a tale of two speeds: long?term strategic confidence in Munich and a powerful shareholder’s vote of confidence, weighed down by a punishing cost base at home.