Lufthansa Group accelerates strategy with fleet cuts and capacity reductions

Germany

Rising kerosene prices and labour-related costs prompt early retirement of aircraft and programme adjustments

Lufthansa Group is accelerating elements of its corporate strategy in response to sharply rising kerosene prices and additional financial pressure from labour disputes. The company has approved an initial package of measures that includes reductions in flight capacity across short-, medium- and long-haul routes, alongside steps to modernise the fleet more quickly.

The decision follows a significant increase in fuel costs, which have more than doubled compared with levels before the Iran conflict. According to the company, the measures aim to reduce operating costs while strengthening the competitiveness of its airline platforms.

Till Streichert, Chief Financial Officer of Lufthansa Group, said: “The package for accelerated implementation of fleet and capacity measures is unavoidable in light of the sharply increased kerosene costs and geopolitical instability. The goal is to focus our short- and medium-haul platforms more clearly and make them more competitive. In this regard, we had already identified the prospective removal of CityLine from our program as part of our strategic development for some time, independently of the current geopolitical crisis. The current crisis is now forcing us to implement this measure earlier. This is a painful step, particularly with regard to the colleagues at Lufthansa CityLine. It is therefore all the more important now to find continued employment opportunities within the Group.”

Capacity reductions in three stages

The first step takes effect immediately during the current summer flight schedule. The 27 operational aircraft of Lufthansa CityLine will be permanently removed from the flight programme starting within days. The Canadair CRJ aircraft used by the subsidiary are nearing the end of their operational lifespan and have comparatively high operating costs.

A second step will follow at the end of the summer schedule. The airline group will retire the last four Airbus A340-600 aircraft in October, bringing the era of this type at Lufthansa to an end. At the same time, two Boeing 747-400 aircraft will be grounded during the upcoming winter season, with a full phase-out of this model planned next year.

The third stage is planned for the winter 2026/2027 schedule. As part of a broader consolidation of short- and medium-haul operations across six Lufthansa Group hubs, capacity under the Lufthansa core brand will be reduced by the equivalent of five aircraft.

Fleet adjustments and fuel savings

According to the group, the measures will produce significant savings in fuel consumption. The early retirement of older aircraft removes particularly fuel-intensive models from operation, while lower overall flight capacity reduces the volume of kerosene that must be purchased at market prices.

Currently around 80 percent of the Lufthansa Group’s fuel demand is hedged based on crude oil prices. The remaining 20 percent must be bought at current market rates. By reducing capacity, the group expects to cut this unhedged portion of fuel consumption by roughly 10 percent.

In parallel with the capacity adjustments, Lufthansa Group plans to allocate nine additional Airbus A350-900 aircraft to Discover Airlines as part of its medium-term fleet strategy.

Cost reduction and workforce transition

Beyond operational measures, the group has introduced additional cost-saving targets for administrative spending, including limits on staff recruitment, internal events and external consulting services. These steps support an existing plan to reduce administrative positions across the group by 4,000 roles by 2030.

With the planned phase-out of Canadair regional jets at Lufthansa CityLine by the end of the year, the company has already offered employment alternatives to affected employees. Ground staff have been offered positions at the newly established Lufthansa Aviation GmbH, while cockpit and cabin crews were given transfer opportunities to Lufthansa City Airlines under comparable multi-year compensation conditions.

Discussions with employee representatives at Lufthansa CityLine regarding a reconciliation of interests and a social plan are expected to begin shortly. The company says its goal remains to provide employees with opportunities for continued careers within the Lufthansa Group.