Tourexpi
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.
Image
Credit: © Lufthansa Group
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