Lufthansa unveils package of cuts to save on fuel costs

Lufthansa has become the first major European carrier to announce cuts as a consequence of rising fuel prices due to the war on Iran.

The parent Lufthansa Group announced swingeing cuts to the German airline’s schedule and fleet in acceleration of a planned restructuring due to the high cost of jet fuel and impact of industrial action.

It reported the immediate shutdown of regional carrier Lufthansa CityLine, with its 27 aircraft to be “permanently removed from the flight programme to reduce further losses”, starting from Saturday.

Lufthansa had already announced plans to wind up its loss-making CityLine subsidiary, which operates German domestic and European short-haul flights, in February 2025.

However, the carrier will also cut long-haul capacity at the end of the summer schedule by removing six wide-body aircraft from its fleet – four Airbus A340s and two Boeing 747s – and reduce its short-haul and medium-haul capacity for winter 2026-27 by grounding a further five aircraft.

The group also announced targets for a “further reduction of administrative costs”, with new savings targets for “staff recruitment, internal event and external consulting services” on top of existing plans to cut 4,000 administrative roles group-wide by 2030.

In a statement confirming the cuts, Lufthansa said: “The package of measures generates a disproportionate savings effect on fuel costs. 

“On the one hand, particularly inefficient aircraft are being removed from flight operations early. On the other hand, the saved kerosene quantity reduces the unhedged portion of the group’s fuel requirements.”

It noted group airlines are 80% hedged on fuel but the remaining 20% “must be purchased at significantly increased market prices”. 

Group chief financial officer Till Streichert 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.

Streichert said: “We had already identified the prospective removal of CityLine from our programme as part of our strategic development, 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 colleagues at Lufthansa CityLine.”

Streichert insisted there would be every effort to offer affected employees “opportunities within the group".

Lufthansa’s previously announced cuts had already triggered a spate of industrial action, with hundreds of flights cancelled on April 16-17 due to the latest two-day strike by pilots.