Europe’s largest airline group, Lufthansa, has announced the end of its regional subsidiary CityLine, in an earlier than planned decision, taken amid persistent social tensions and deteriorating economic conditions linked to the war in the Middle East and the ongoing strikes by its flight crew
The Lufthansa press release read as,
"In view of significantly increased kerosene prices, which have more than doubled compared to the period before the Iran war, as well as rising additional burdens from labor disputes, the implementation of the corporate strategy is being partially accelerated."
"To this end, an initial package has been approved that provides for a reduction of the flight program on short-, medium-, and long-haul routes, as well as measures for early fleet modernization."
Ironically, the decision comes as Lufthansa celebrated its 100th anniversary on Wednesday in a tense atmosphere. The ceremony, held in a hangar at Frankfurt's main airport, brought together political and business leaders, but took place during a day of strike action by cabin crew called by the UFO union.
CFO Till Streichert, said that,
The “current crisis” is forcing the Lufthansa Group to implement the measure earlier, noting that 27 aircraft, which are already nearing the end of their technical life and have high operating costs, will be permanently retired from Saturday. The measure, Streichert stressed, aims “to reduce further losses for the company suffering from deficits.” It is noted that CityLine was originally scheduled to close in 2028.
The group has been facing a surge in industrial action for several months. Pilots have also staged repeated strikes, resulting in the cancellation of thousands of flights since the beginning of the year, further straining operations.
Capacity cuts are also planned at the parent company, with six older aircraft being phased out of long-haul flights, while Lufthansa's winter schedule will then see five aircraft cut on medium- and short-haul routes. At the same time, its cost-effective Discover subsidiary will expand with new A350 aircraft.
“The measures are inevitable in light of the sharply increased cost of kerosene and geopolitical instability,” said Lufthansa’s chief financial officer. In recent days, Lufthansa’s flight operations have been severely disrupted by successive strikes, first by pilots and then by cabin crew members.
Against the background of the scheduled end of flight operations of the Canadair jets at Lufthansa CityLine by the end of the year at the latest, and a possible termination of all flight operations, offers for follow-up employment have already been made to all employee groups in the past:
Earlier, KLM announced that it would cut 160 flights next month due to the increased cost of jet fuel. Warnings of immediate cuts in airlines, due to expensive fuel but also to its adequacy due to the war in Iran, were expressed by the president of the International Energy Agency (IEA) Fatih Birol.
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