Middle Eastern routes shrink, foreign airlines accelerate pushing back into China

Capacity is expected to tilt toward Asia in the long term

After suspending its Beijing–Frankfurt route for more than a year, Lufthansa Germany is now planning to step up its China flights again.

This shift is driven by rapid changes in the situation in the Middle East.

Lufthansa’s Chief Financial Officer Till Streichert revealed recently that as the Middle East conflict disrupts the operations of Gulf airlines, some market demand unexpectedly shifted; Lufthansa’s March departure flight bookings have increased significantly.

He said that about 700 aircraft were either grounded or forced to operate at reduced capacity due to the conflict. As a result, a large volume of Europe-Asia transfer passenger traffic that was originally handled by Middle East carriers was forced to overflow and move to airlines that are still operating normally.

Within the two weeks after Iran was hit by strikes from the U.S. and Israel on February 28, Lufthansa’s ticket bookings for March rose by about 20%, with growth even more pronounced on Asia-Pacific routes.

“We’re seeing bookings increase noticeably in a short period of time, and we are doing our best to accommodate this demand.” Streichert said.

In response to this shift, Lufthansa quickly launched a capacity adjustment.

On one hand, the company plans to add more than 60 flights, focusing on Asian destinations such as Bangkok, Singapore, New Delhi, and Shanghai. Management believes that it is realistic for capacity to tilt more toward Asia over the long term.

On the other hand, Middle East routes continue to shrink:

• Dubai and Tel Aviv routes are suspended until May 31

• Abu Dhabi, Beirut, Tehran, and other routes are suspended until October 24

Capacity is moving away from highly uncertain areas and toward markets where demand is more stable.

As one of the international airlines that entered the China market earliest, Lufthansa’s route network in China has a century-long history. Today, its 2025/2026 winter flights mainly focus on Shanghai, Beijing, and Hong Kong, connecting its two major hubs in Frankfurt and Munich.

After the recovery of the civil aviation market following the pandemic, the restoration of Lufthansa’s China–Germany routes was once relatively slow. In November 2024, its weekly round-trip flights to and from the Greater China region were down by about half compared with 2019. Even at the end of October of the same year, it even suspended its nonstop Beijing–Frankfurt service.

It is worth noting that although demand has increased, Lufthansa still faces structural pressure in the Asia-Pacific market.

Based on its financial report data, in 2025 Lufthansa’s Asia-Pacific capacity will still decline year over year by 2%, and revenue is also falling—making it the only region among its major markets with “weakness in both volume and price.”

Even when looking ahead to 2026 Q2 and Q3, Lufthansa’s expected capacity growth in Asia-Pacific is only 1.1%, far lower than the market-wide overall recovery speed of 8.1%.

This means: while the overall Asia-Pacific market is rebounding at high speed, Lufthansa is lagging behind in the competition.

A bigger issue is that the current growth in booking demand does not necessarily equate to a real expansion of capacity.

Bookings may be strong, but rising fuel prices have eaten into a large portion of profits, and hedging strategies can only partially relieve the pressure. Lufthansa had previously locked in about 80% of its fuel usage for 2026 and about 40% for 2027, but the fuel price lock-ins all occurred before the recent surge in oil prices.

“Even based on current price levels, Lufthansa’s fuel spending for 2026 will be higher than the forecasts from just a few weeks ago.” Streichert said.

As Brent crude oil breaks through $100 per barrel, Lufthansa has raised ticket prices and said that if oil prices remain at high levels, further increases are not ruled out.

In the short term, fuel supply remains stable. Lufthansa has long-term contracts with fuel suppliers, and delivery in the coming months is expected to be steady. However, uncertainty in the medium to long term is accumulating. Europe’s energy supply is highly dependent on the Strait of Hormuz. If the situation worsens, supply-chain stability will be put to the test.

In addition, fleet issues are also limiting the release of capacity. Due to delayed deliveries of new aircraft and engine problems, Lufthansa has had to extend the service life of older, high-fuel-consumption aircraft types. Currently, 8 to 10 aircraft are still grounded due to issues with Pratt & Whitney engines under RTX Corp.; the company partially supplements capacity through wet-lease arrangements.

Currently, Lufthansa is in talks with Airbus and Boeing regarding a new round of widebody aircraft orders. The related aircraft are expected to be delivered as early as 2033. Against the backdrop of constraints on the manufacturing side, capacity cannot be released quickly, and airlines can only meet the growth in demand at higher cost.

The demand window is already open, but whether Lufthansa can truly seize this opportunity depends on how quickly it can resolve its own supply-side bottlenecks.