Frankfurt, September 11 - Lufthansa Group, one of Europe’s leading aviation conglomerates, is making significant strides in its comprehensive turnaround plan, as announced by CEO Carsten Spohr in a recent press briefing in Frankfurt. The airline, which operates carriers such as Lufthansa Airlines, Eurowings, Swiss, Austrian, and Brussels Airlines, has faced substantial challenges in recent years, including spiraling operational costs and labor disruptions. In 2024, the group issued two profit warnings as its core Lufthansa Airlines brand struggled with a €94 million loss, driven by higher costs, aircraft delivery delays, and intense competition, particularly in the Asia-Pacific region. Despite these setbacks, Spohr emphasized that 2025 and 2026 will serve as pivotal transitional years, with the airline group targeting a robust recovery by 2026. The turnaround strategy focuses on cost reduction, operational efficiency, and fleet modernization to restore profitability and enhance customer satisfaction, positioning Lufthansa as a competitive player in the global aviation market.
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The turnaround plan’s progress is evident in several key areas. Lufthansa has significantly improved its operational stability, reducing flight cancellations to a mere one percent, a milestone that has boosted customer confidence and satisfaction. This achievement is critical as the group reported a 7% increase in passenger numbers to 131 million in 2024, with a record-high passenger load factor of 83.1%. Spohr highlighted the strategic shift toward integrating group carriers more closely, including Swiss, Austrian, and Brussels Airlines, to streamline operations and reduce complexity. Additionally, Lufthansa is leveraging its lower-cost subsidiaries, such as Eurowings, City Airlines, and Discover, to drive growth. These carriers operate with simpler cost structures, enabling better margins on short-haul and leisure routes, which have recovered faster post-pandemic. By prioritizing these segments while maintaining its premium long-haul offerings, Lufthansa aims to balance revenue streams and address the cost disadvantages plaguing its core operations.
Fleet renewal is another cornerstone of Lufthansa’s turnaround strategy, with the group expecting to receive 60 new Airbus and Boeing aircraft by the end of 2026. The recent delivery of a Boeing 787 Dreamliner equipped with the luxurious Allegris cabin underscores the airline’s commitment to enhancing the passenger experience while reducing fuel consumption and unit costs. These modern aircraft are expected to replace older, less efficient models like the Airbus A340 and Boeing 747, which have contributed to higher maintenance expenses. Spohr noted that the fleet modernization will not only lower operational costs but also align with the group’s sustainability goals, a growing priority in the aviation industry. Furthermore, Lufthansa’s multi-hub strategy, which involves basing over 50% of its fleet outside its costly German hubs in Frankfurt and Munich, is gaining momentum. The ongoing takeover of Italy’s ITA Airways and expanded operations in Vienna and Brussels are designed to optimize costs by tapping into less expensive markets.
Despite the challenges of 2024, including a €265 million loss in the first half and strikes costing €450 million, Lufthansa’s outlook for 2025 is optimistic. The group anticipates a 4% capacity increase to meet sustained high demand for air travel, with revenues already surpassing €10 billion in two consecutive quarters of 2024. Spohr’s vision includes achieving €2.5 billion in recurring operating profits by 2028 for Lufthansa Airlines alone, supported by a €1.5 billion gross earnings impact from the turnaround program by 2026. While labor tensions, such as potential pilot strikes over pension adjustments, remain a concern, Lufthansa’s strategic focus on cost discipline, operational reliability, and fleet investment positions it for a sustainable recovery. By addressing structural inefficiencies and capitalizing on growth opportunities in leisure travel, Lufthansa is poised to strengthen its market position and deliver long-term value to stakeholders.