Writes through with Lufthansa, Nigeria and EU

By Shashwat Awasthi, Joanna Plucinska and Ilona Wissenbach

LONDON/BANGALORE/FRANKFURT, April 16 (Reuters) - Britain's easyJet EZJ.L said on Thursday its bookings were lagging last year's, while Germany's Lufthansa LHAG.DE became the first major carrier to ground planes due to high jet fuel costs as airlines counted the cost of the Iran war.

Investors warned easyJet, which said it expects a deeper first-half loss, might need to revise its outlook for the year as a whole amid concerns that uncertainty over jet fuel supplies and the wider impact of the war will prompt other revisions.

Wizz Air WIZZ.L has already said its annual net profit will take a 50 million euro ($59 million) hit, with Air France-KLM AIRF.PA set to report its first-quarter results on April 30, after tacking a fuel surcharge onto its tickets. Dutch carrier KLM, a subsidiary of Air France-KLM, said on Thursday it would cut 160 flights in the coming month due to fuel costs.

Analysts warn further capacity cuts, groundings and surcharges are likely, with markets watching airlines' results for clues on the extent of the war's impact on their fragile profit margins and revenue.

Nigerian airlines on Thursday warned they could stop flying due to high jet fuel prices, while the European Union is set to announce measures to maximize refinery capacity after European airports warned of an impending jet fuel crunch.

"The conflict in the Middle East has introduced near-term uncertainty around fuel costs and customer demand. As expected, the booking curve has shortened in recent weeks, resulting in lower than normal forward visibility," easyJet said.

EasyJet's shares fell by as much as 9%, while Ryanair RYA.I and Wizz Air also slipped. Lufthansa shares were down 1.36% at 1416 GMT soon after it announced the groundings.

While analysts and investors said easyJet might need to further revise its forecast for the financial year, the strength of its holidays business and balance sheet might help shield the airline from the ongoing turmoil.

"We expect forecast to come back for FY26," said Dudley Shanley, head of aviation at Goodbody, adding that slower bookings and yield are feeding into investor scepticism.

LATER BOOKINGS, MORE DOMESTIC TRAVEL

The Iran war has sent jet fuel prices soaring, upending the global aviation industry and forcing airlines to raise fares, curb growth plans and rethink forecasts.

EasyJet CEO Kenton Jarvis said on a media call that travellers are booking closer to travel dates and there had been an initial shift to more domestic, city destination travel.

"It's a later booking window we're really seeing. And if there is any shift, it's a little bit away from the eastern Mediterranean, a little bit towards the western Mediterranean," Jarvis said, adding that travel to Cyprus, Egypt and Turkey, however, was slowly recovering.

Lufthansa had earlier launched a number of new flights to Asia in an effort to capitalize on shifting demand tied to the war. It vowed to continue its broad restructuring strategy, promising investors a more streamlined, cost-efficient company.

However, the decision to ground 27 of its planes servicing its CityLine subsidiary, as well as four older jets in its core carrier, Lufthansa, rattled unions. Lufthansa has faced costly and disruptive strikes by pilots and cabin crew in recent weeks.

SUMMER FUEL HEDGED

Airlines have said it is difficult to predict how demand might shift in the second half of 2026 as tourists fear travel turmoil and price hikes.

Bookings for the July-to-September fourth quarter were 30% sold, easyJet's Jarvis said, while load factors, the portion of available seats filled by paying customers, were uncertain.

"That will very much depend on what the late-summer market is like, and obviously what happens to the conflict in the next week or two," he said.

EasyJet, which had already warned the Iran war would push up ticket prices towards the end of the summer and had impacted bookings, said it was well hedged against fuel volatility, with 70% of summer fuel locked in at $706 per metric ton.

The hedges will start unwinding towards the end of the summer, however, potentially pushing higher costs onto fares.

"Pricing is protected in the short term. But clearly, if fuel remains high for longer, then that will feed in for the whole industry in terms of prices," Jarvis told reporters.

($1 = 0.7364 pounds)

($1 = 0.8488 euros)