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Lufthansa Accelerates Job Cuts as Kerosene Prices Rise

Lufthansa Accelerates Job Cuts and Fleet Reductions Amid Rising Kerosene Prices
Lufthansa Group is intensifying its cost-cutting measures by accelerating job reductions and scaling back its fleet in response to soaring kerosene prices, which have more than doubled since the onset of the Iran war. These financial pressures, compounded by ongoing labor disputes, are significantly impacting the airline’s profitability. The company has approved an initial package of actions aimed at reducing expenses and modernizing its fleet, reflecting a wider industry trend as carriers contend with geopolitical instability and escalating fuel costs.
Immediate Fleet Retirements and Employment Adjustments
As part of the immediate cost-containment strategy, Lufthansa will permanently withdraw all 27 aircraft operated by its regional subsidiary, Lufthansa CityLine, starting imminently. The Canadair CRJ fleet, which is approaching the end of its technical service life and is burdened by high operating costs, will be retired to stem losses at the underperforming regional airline. The cessation of Canadair jet operations is scheduled for no later than the end of the year, with the possibility of a complete halt to all CityLine flight operations. The company has already extended alternative employment offers to all affected staff groups.
Long-Haul Capacity Reductions and Fleet Modernization
In a subsequent phase, Lufthansa plans to reduce its long-haul capacity by retiring six intercontinental aircraft at the conclusion of the summer schedule. This includes the final retirement of four Airbus A340-600s in October, marking the definitive end of this aircraft type’s service with the airline. Additionally, two Boeing 747-400s will be grounded for the winter season, with full retirement of the model anticipated next year. These steps are part of a broader effort to streamline the fleet and improve operational efficiency.
Further Consolidation in 2026/27 and Administrative Cost Savings
Looking ahead to the 2026/27 winter timetable, Lufthansa intends to implement further capacity reductions within its core brand. This will involve the removal of five additional aircraft as part of a comprehensive consolidation of short- and medium-haul operations across the Group’s six hubs. The early retirement of older aircraft types aligns with Lufthansa’s strategy to reduce the number of sub-fleets and accelerate the integration of short- and medium-haul traffic.
Alongside fleet adjustments, Lufthansa is pursuing administrative cost savings by introducing new targets that limit staff recruitment, internal events, and external consulting services. These measures support the Group’s existing objective of cutting 4,000 administrative positions by 2030. The medium-term fleet strategy also includes the planned allocation of nine additional Airbus A350 aircraft to Discover Airlines, further contributing to operational efficiency.
Industry-Wide Response to Fuel Price Pressures
Lufthansa’s actions mirror a broader industry response, with airlines across Europe, including competitors such as KLM, reducing capacity and adjusting operations to counteract the impact of rising jet fuel prices. Many carriers have increased airfares and reduced flight frequencies to offset the substantial rise in operating expenses driven by fuel costs.
The latest measures are expected to yield a disproportionate reduction in fuel expenses by retiring less efficient aircraft early and lowering overall kerosene consumption. Currently, approximately 80% of Lufthansa’s fuel consumption is hedged based on crude oil prices, while the remaining 20% is purchased at significantly higher market rates. The new initiatives aim to reduce this unhedged portion by around ten percent, thereby mitigating the financial impact of volatile fuel prices on the Group’s performance.

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