Lufthansa Plans To Reduce Fleet Size By 100 Aircraft

Filed Under: Lufthansa

Lufthansa Group has today revealed what’s on the agenda for the company’s (virtual) Annual General Meeting, taking place on May 5, 2020. Specifically, they’ve shared the remarks that will be made by Lufthansa Group CEO Carsten Spohr.

At this point there’s not really any bad news that comes as a surprise, but there are some interesting revelations in here.

Lufthansa will reduce fleet size by 100 planes

Lufthansa Group has just over 750 planes, while Lufthansa has just under 300 planes. The parent company plans to reduce the size of the overall fleet by about 100 aircraft.

Lufthansa had already announced plans to retire six A380s, seven A340-600s, five 747-400s, and 11 A320s, so that’s 29 planes. Chances are we’ll see even more cuts at Lufthansa, and similar cuts at Austrian and SWISS.

However, it sounds like we should expect way more than 100 aircraft retirements. The airline group isn’t saying they’ll retire 100 planes, but rather that the overall future fleet will be 100 planes smaller.

They’ll no doubt continue to take delivery of at least some planes, meaning they’ll have to retire more than 100 planes as well.

Lufthansa is retiring some 747-400s

Lufthansa may lay off 10,000 employees

Based on planned reductions, Lufthansa says that they have 10,000 too many employees. The company won’t be able to “rule out laying off staff for operational reasons.”

Unless Lufthansa can find a way to keep as many people as possible at the company using part-time employment models, expect big layoffs.

Lufthansa could lay off 10,000 employees

Lufthansa negotiating aircraft deferrals

Prior to this pandemic many airlines were in growth mode, though suffice to say the current situation will reverse that trend. The problem is that planes are ordered way in advance, so they can’t easily be cancelled when economic conditions change.

Lufthansa has nearly 200 aircraft on order, including A320neos, A321neos, A350-900s, 777-9s, and 787-9s.

Lufthansa is now in negotiations with aircraft manufacturers with regards to postponing aircraft deliveries, as the company doesn’t plan to returning to the previous fleet size “for an indefinite period.”

There had already been rumors of Lufthansa deferring or cancelling their 777-9 order, which would also mean that Lufthansa’s new business class would be delayed even further as well.

Will Lufthansa actually get 777-9s soon?

Lufthansa plans to spend the summer on the ground

Currently Lufthansa is operating a very limited schedule, and it looks like we should expect that to continue:

  • Lufthansa is “preparing to spend this summer on the ground”
  • Lufthansa “hopes for a proper restart in autumn at the earliest”
  • Lufthansa believes it’s going to be a very slow start-up phase, and the company doesn’t expect global demand to “find its new balance until 2023”

That’s pretty significant — Lufthansa expects to recover by 2023, but even then expects to be operating on a significantly more limited scale.

Lufthansa doesn’t plan on operating many flights in summer

Bottom line

There’s nothing surprising here, but it’s very clear that Lufthansa is taking drastic action. The airline expects a return to a new normal in 2023, but even that will only be with a much smaller fleet.

I’ll be curious to see to what extent Lufthansa is able to negotiate their way out of their current aircraft orders, and in particular the 777-9s.

Are you surprised by how drastic of an approach Lufthansa is taking?

Comments
  1. If I were a high ranking LH management and got this directive, I would put the A380 on the chopping block. I would put the 747-400 on the chopping block, too. The 747-8i, I would try to save.

    I would also try to defer those A320neo and 777-9 for years, making them effectively a cancellation.

    Sorry to see LH shrink.

  2. Lufthansa was staffed pretty inefficiently before the crisis. They are now hoping to take advantage of the situation and finally make unnecessary positions redundant without looking too bad themselves.

    Another point is the massive over-capacity in the European market even before the crisis. Airlines like Norwegian with unsustainable rock-bottom fares have pushed too much capacity into the market financed by the irresponsible fiscal politics of the European Central Bank.
    They have essentially created new, low-quality budget travel demand that is not healthy for the environment, not beneficial for the tourism destination countries as these travelers are cheapskates, and not sustainable long-term as these people are now loosing their jobs and little savings so they stop traveling.

  3. This company will have room to deal with aircraft deferments as they are taking out bankruptcy correct? I say LH should move to an all Airbus fleet minus the expensive to operate A380 and A340 aircraft. The order for all additional Boeing planes should be put off. The 747’s could be sold, including the 748 and convert those into cargo planes for the airline. Crazy times indeed.

  4. Stop the hysteria/ 100% fake news. You really believe people will stop traveling??? Never. When other airlines start flying Germans wherever they wish…just watch, LH will pop right back, act like nothing happened, start loading flights etc…
    Dont fall for it folks…2023??? give me a break, laughable.

  5. “Lufthansa may lay off 10,000 employees”
    Here’s to hoping it includes all of the ones responsible for work stoppages the last few years.

  6. I am not terribly surprised – in fact, I wouldnt be surprised if we saw more airlines drastically downsize or restructure their fleets. Certainly US airlines are moving aircraft retirement forward.

    I do think air travel will come back before 2023, though. We might have different rules we need to abide by as travelers, but fundamentally people will still want to travel.

  7. Interesting fact…. Lufthansa A340-600 is the only commercial aircraft with lavatory for economy class installed in cargo hold 🙂

  8. @Tomislav: yes – I think it’s a really nice design idea. My last flight before everything closed was on that plane. No one is sitting next to a lav, no disturbance from light/sound/smell, no need to guess which way to go for shorter wait times, and the lavs themselves have more space.

  9. Do you feel safe to go visit Italy, Spain or France this year? I would think people will be less likely to travel for leisure this year and possibly half of next year.

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