Lufthansa Is Struggling

Germany’s flag carrier, Lufthansa, has been one of the hardest hit companies in recent years, with many complexities affecting its operating ability.

However, the airline’s executive team has arguably emphasised those challenges further, being one of the more public when detailing these struggles.

Now, Lufthansa is struggling across the important transatlantic market, facing considerable competition from various airlines across key markets.

Furthermore, the competition has led to a fall in ticket prices, and all of these effects mean that the company’s important transatlantic operations are becoming less profitable than they once were.

According to its chief financial officer, the development of low-cost carriers and airlines expanding their network to focus on more holiday and leisure destinations across Europe affects Lufthansa’s ability to sell seats.

Ultimately, this major shift, which is only a recent change, follows major airlines within the United States adjusting their network to send aircraft to markets with greater potential than others.

While Lufthansa should always expect fluctuations in its business and performance across key markets, these developments come at a time when it faces much other adversity.

Lufthansa has already announced it’ll adjust growth expectations in the future to try to cut operating costs, focusing on sending smaller aircraft to other airlines within the group.

Moreover, the carrier faces colossal delays in acquiring next-generation aircraft from Airbus and Boeing, with timelines continuing to be unmet.

Lufthansa has stated several times that these delays are costing it hundreds of millions each month as it is forced to adjust its network and retain older, less efficient aircraft to mitigate prospective capacity loss.

With so much adversity, Lufthansa executives have been clear about implementing a thorough turnaround plan that focuses on bringing the Lufthansa known and loved back to life, not the state the airline finds itself in.

However, as part of these turnaround plans, flights and aircraft will likely be reduced as the airline prioritises its core business to ensure stability and long-term efficiency and focuses on truly being profitable.

Malaysia Airlines has recently become the latest airline to prioritise stability by reducing its route network following complexities with aircraft and engines. Thus, this form of turnaround has become increasingly popular for airlines facing similar challenges, but the impact is at a varying degree.