In October 2023, Lufthansa announced plans to launch yet another subsidiary, with the sole purpose of finding a loophole to pay employees less. The airline will be launching passenger operations this week, so I wanted to go over all the details, especially since there’s a major “catch” to flying with this airline…
In this post:
The basics of new Lufthansa City Airlines subsidiary
Lufthansa City Airlines is Lufthansa’s newest subsidiary, and it’s beginning operations for flights as of June 26, 2024. The airline will be launching operations with a one-year-old Airbus A320neo that has the registration code D-AIJI, and then the second plane will be a 16-year-old Airbus A319 with the registration code D-ABGH.
In the long run, Lufthansa City Airlines plans to operate Airbus A220-300s. Lufthansa Group has ordered up to 60 of these (40 firm orders plus 20 options), and they’re primarily intended for Lufthansa City Airlines. Deliveries are expected to start in 2026. Until then, the airline will operate a mix of Airbus A320neos and Airbus A319s.
As far as routes go, the plan is for Lufthansa City Airlines to operate out of Lufthansa’s biggest hubs, serving feeder routes for Lufthansa, alongside Lufthansa mainline jets, as well as Lufthansa CityLine jets. Service will launch as of June 26, 2024, and the first flights will be out of Munich (MUC):
- Domestic destinations will include Berlin (BER), Bremen (BRE), Cologne (CGN), Dusseldorf (DUS), Hamburg (HAM), and Hannover (HAJ)
- International destinations will include Birmingham (BHX), Bordeaux (BOD), and Manchester (MAN)
Lufthansa City Airlines is using the two letter code “VL.” Initially you can expect that the airline is just replacing existing Lufthansa services, so the airline isn’t actually adding any new service. City Airlines has a separate Air Operator Certificate (AOC), which it got from the German Federal Aviation Authority back in June 2023.
Jens Fehlinger, Managing Director of City Airlines, explains how the intent with this subsidiary is to create sustainable (in other words, lowering paying) jobs in Germany:
“Lufthansa City Airlines is contributing to the future viability of the hubs in Munich and Frankfurt. We are looking forward to new modern Airbus A220 and A320neo deliveries in the coming years. For our guests and employees, we are driving forward our renewal and thus strengthening Lufthansa’s planned growth in long-haul traffic.”
What does Lufthansa City Airlines mean for passengers?
From a passenger experience standpoint, what should you expect when flying Lufthansa City Airlines? Well, in terms of the onboard passenger experience, it should be business as usual when it comes to the cabin, seats, food, drinks, etc. The only difference onboard is that the plane will have a slightly modified livery, and you’ll be served by crews who specifically work for this subsidiary.
Now, when off the plane, there is a major difference with Lufthansa City Airlines. The airline is fully participating in the Lufthansa Miles & More program, so you can earn and redeem miles, and take advantage of elite perks.
However, Lufthansa City Airlines isn’t as of now a partner with Star Alliance in any way, given that the airline has its own “code.” This is super frustrating — it means you can’t earn and redeem Star Alliance miles for Lufthansa City Airlines flights, and Star Alliance Gold elite perks (like lounge access, priority boarding, etc.) also wouldn’t apply.
The implementation here is extremely frustrating. Lufthansa is replacing mainline flights with Lufthansa City Airlines flights, and in the process is screwing over anyone who may be a non-Miles & More Star Alliance flyer. I hope Lufthansa changes its policy on this, because it’s going to lead to confusion and disappointment.
Why does Lufthansa need another subsidiary?!
It’s almost comical just how many subsidiaries Lufthansa has. Before City Airlines, we had Eurowings, Discover Airlines, CityLine, and I’m sure I’m missing some. And that doesn’t even consider all the subsidiaries in the past, plus all the other Lufthansa Group partner subsidiaries.
So, why does Lufthansa need yet another subsidiary? Well, currently there’s the Lufthansa CityLine subsidiary, which primarily operates Canadair and Embraer regional jets, though also operates some Airbus A319s and A320s (and in the past even operated A340s).
The catch is that Lufthansa has a scope clause with its mainline pilots regarding this subsidiary, and they’re limited to only flying planes up to a certain size. There’s an exemption currently in place that allows them to fly a small number of A319s and A320s, but that exemption will be ending in the next couple of years, which is why Lufthansa is setting up yet another subsidiary.
So while Lufthansa can’t have CityLine operate larger aircraft in the long run, the company can apparently start a brand new subsidiary, and have those planes be bigger, as that airline isn’t governed by Lufthansa’s current bargaining agreement with pilots. So expect crews at Lufthansa City Airlines to get comparable pay to Lufthansa CityLine, only on bigger jets…
It’s just kind of amazing how bad faith the negotiations are with these contracts and subsidiaries, eh? I imagine that in the next round of negotiations with mainline staff, the expansion of City Airlines will also be addressed.
From a passenger standpoint, one major difference is that CityLine is treated the same as any Lufthansa flight in terms of earning and redeeming miles and elite perks, while that won’t be the case with City Airlines.
Bottom line
Lufthansa is launching another subsidiary this week, named City Airlines. The airline will operate Airbus A320neos and A319s out of Frankfurt and Munich, with feeder services similar to those currently operated by Lufthansa CityLine, as well as Lufthansa mainline jets. Eventually, the airline will operate A220s, and will become quite large.
The intent is to be able to hire employees with a cheaper labor contract, without violating the agreement with Lufthansa’s mainline pilots. Unfortunately for passengers, this airline also doesn’t come with any Star Alliance recognition… at least as of now.
What do you make of Lufthansa City Airlines?
Why do people keep flying with them? Germans are spoilt for choice, particularly if they live in Munich or Frankfurt, and it's not as if they're hard-up for a quid.
I guess it's the same reason Brits keep flying BA, Kiwis choose NZ, Australians fly Qantas, and Americans keep flying American - a captive audience, embedded in the frequent flyer program, and beholden to products that just don't compete with the best.
Their European network is second to none, people generally don't like taking overnight connections or ending up at an airport 200km from their actual destination.
It's not just FFP. LH dominates central Europe in a way that you often simply don't have a choice. Sure, there are some smaller carriers like LO, which is excellent, but their network is limited. More often than not, your only alternative is AFKL, but that can be a major detour due to the eccentric position of their hubs.
I'm currently in DEB. Luckily I didn't have to fly, but if I would, my only option would be Lufthansa.
So, it looks like the Allegris seat variety onboard A350 was modelled on the LH Group subsidiary chart...
Also, dyslexics may read it as Allergies, which travellers would risk to acquire when flying LH
and Airlines wonder why their employees are furious.
I expect that Iberia Express (I2) is a similar entity which has been expanding of late (I2 now operates MAD-TLV which used to be a classic IB route)
With the price of LH stock going down and down, shareholders made their judgement call about LH‘s pathetic management.
Their name has been changed before they even started flying, from "City Airlines" to "Lufthansa City Airlines".
I don’t understand how LH Group is so so convoluted and continues to do so whereas AF-KL has eliminated Joon and focused on core operations and Transavia. And LH Group’s fleet planning is such a mess, even before Covid, where an A330 or A340 went from Lufthansa then Swiss then Brussels then Edelweiss (just a random fictional example).
AF also operates a domestic subsidiary called Hop! And KL operates a local subsidiary called KLM City hopper. And they have Transavia for leisure short. So they have 3 subsidiaries for short haul feeder to their two hubs and domestic flights and a low cost price fighter.
Vs LH which also has 2 hubs the only difference is they don't have a long haul leisure subsidiary like Discover (or Edelweiss for Swiss) and they...
AF also operates a domestic subsidiary called Hop! And KL operates a local subsidiary called KLM City hopper. And they have Transavia for leisure short. So they have 3 subsidiaries for short haul feeder to their two hubs and domestic flights and a low cost price fighter.
Vs LH which also has 2 hubs the only difference is they don't have a long haul leisure subsidiary like Discover (or Edelweiss for Swiss) and they don't have an even lower cost feeder airline not integrated in their loyalty program
I get that but to the everyday consumer who perhaps travels a few times a year or even just once know that AF-KL has Hop! and CityHopper (and Transavia is a total different entity) exists.
But with LH Group, it’s like a new subsidiary every other year.
As a *A flyer I avoid LH as much as possible. Add this to the list of reasons why.
I never fly with them intercontinentally, but for trips within Europe they aren't easy to avoid. Unless you are flying to/from a major hub, the alternatives to them typically are restricted to KLM with their diabolical hub airport and lounge mice and LCC flights with erratic schedules and/or inconvenient timing.
AFKL works well for me. Are AMS and CDG great? No, but neither is FRA. And for central European itineraries there are some really nice smaller carriers like LOT.
LHG isn't always totally easy to avoid but when it is possible, the alternatives are significantly better.
It is unbelievable how European regulators continue to allow Lufthansa to circumvent collective bargaining agreements and stricter labor laws by using these sham subsidiaries, not to mention how Lufthansa seems to be virtually exempt from antitrust laws when it comes to merger control.
I think Lufthansa pilots should strike until pay scales are unified among the entire group. Then there wouldn't be any benefit for the airline to act so unscrupulously.
All of the Lufthansa Group subsidiaries are:
Austrian Airlines
Brussels Airlines
Lufthansa City Airlines
Discover Airlines
Eurowings (plus Eurowings Europe)
Lufthansa Cargo
Lufthansa Regional (Air Dolomiti and Lufthansa CityLine)
Swiss International Air Lines (plus Edelweiss Air)
This just says how weak LH labor groups are in negotiating real scope clauses to prevent scope creep and how the company settled the latest round of strikes knowing full well that they would extract a pound of flesh for the pay raises they agreed to .
that’s all that company do is create more airlines to move employees to pay them low wages
I doubt that City Airlines will be operating under their own VL code, just like Lufthansa CityLine never operated under their CL code. It does say “operated by CityLine” in the booking, but no CL-flight number to be seen anywhere.
I did a test booking for September and there is one flight from MUC to BER shown as “operated by Lufthansa City” which should be VL, but definitely only a LH flight number.
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I doubt that City Airlines will be operating under their own VL code, just like Lufthansa CityLine never operated under their CL code. It does say “operated by CityLine” in the booking, but no CL-flight number to be seen anywhere.
I did a test booking for September and there is one flight from MUC to BER shown as “operated by Lufthansa City” which should be VL, but definitely only a LH flight number.
So you can exhale, as I am pretty sure *A FF benefits will be honoured. No need to stir something up here…
They won't. There's extensive discussion about this on Flyertalk. Lufthansa have said that their intention is for VL to join the Alliance, but unless and until that happens it'll be an Air Dolomiti type situation- no miles or *G perks whatsoever.
The difference is that EN actually operates their flights under EN flight number (plus LH codeshare), so I cannot see that happening.
Some BHX-MUC is filed as VL with an LH codeshare for sure - CL flying is LH operated by CL. So it is different. I cannot see any *A availability on VL flights for example.
Between VL and EN, it's now quite easy to buy a ticket from Lufthansa for travel on 4 LH-coded segments via MUC and receive no *A benefits whatsoever. I wonder whether, on addition to miles and lounge access, they will have the temerity to deny *G members additional baggage. They have also made SN flights to BHX seasonal [for the time being] and cut their route to NCL, clearly doing their best to hand the UK regional market over to KLM.
OMG you’re absolutely right. That changes the situation of course. Very bad move by them.
Most of those subsidiaries' on behalf of their parent company airline. Even in Japan, both JAL and ANA's regional airlines have their own IATA codes, but all except Japan Transocean Air just fly as a normal flight of their respective parent airline.