Lufthansa Group has unveiled a series of accelerated capacity and fleet reduction measures, including the retirement of older aircraft and the removal of regional subsidiary operations, as it responds to sharply rising jet fuel costs and ongoing labour pressures.
The airline said it will immediately withdraw all 27 aircraft operated by Lufthansa CityLine from its flight programme, beginning within days. The fleet, made up of Canadair Regional Jet aircraft, will be phased out due to high operating costs and the end of their technical lifespan.
Further reductions will follow at the end of the current summer schedule, when the group plans to retire its remaining four Airbus A340-600 aircraft in October, alongside the grounding of two Boeing 747-400 jets for the winter season, with a full phase-out of the type planned in 2027.
Additional cuts are planned for the 2026/27 winter schedule, with the Lufthansa core brand reducing short- and medium-haul capacity equivalent to five aircraft across its six main hubs. At the same time, the group will accelerate fleet modernisation by allocating nine additional Airbus A350-900 aircraft to its leisure subsidiary Discover Airlines as part of its medium-term planning.
The measures come as jet fuel prices have more than doubled since the onset of the Iran-related crisis, significantly increasing operating costs. Although Lufthansa has hedged around 80% of its fuel exposure, the remaining 20% must be purchased at elevated market prices. The group said the latest actions are expected to reduce this unhedged portion by around 10%, delivering a disproportionate saving on fuel costs.
More competitive
Chief financial officer Till Streichert said the steps were necessary given the current environment. “The package for accelerated implementation of fleet and capacity measures is unavoidable in light of the sharply increased kerosene costs and geopolitical instability,” he said, adding that the aim is to make the group’s short- and medium-haul operations more competitive.
The announcement builds on an earlier warning from Lufthansa on March 31 about the potential impact of the crisis. Chief executive Carsten Spohr had previously indicated that up to 40 aircraft could be grounded under more severe scenarios, representing a capacity reduction of up to 5%, with older aircraft such as the A340-600, 747-400 and regional jets identified as the most likely candidates. The airline had originally planned capacity growth of around 4% in 2026.
Fuel costs remain central to the group’s outlook. Lufthansa had budgeted around €7 billion for fuel in 2026, with approximately €1.4 billion exposed to market prices. A doubling in oil prices could push that exposure to €2.8 billion, increasing pressure on fares and potentially dampening demand. The airline is also monitoring supply risks, particularly in Asia, where some airports have already limited additional flights to conserve fuel reserves.
The broader disruption is linked to tensions around the Strait of Hormuz, a key route for global oil flows, with elevated prices expected to persist into 2027. In response, Lufthansa is also pursuing administrative cost savings, including reductions in recruitment, events and consulting, as part of a wider plan to cut 4,000 administrative roles by 2030.