What’s Happening To Lufthansa In 2024?

Lufthansa is Germany’s flag carrier, but what is happening to the airline in 2024? What are some of the many challenges it faces, what new projects are ongoing, and what opportunities have occurred?

Lufthansa Struggles With Strikes

Over several years, one of Lufthansa’s largest struggles was ongoing unrest across its workforce. This unrest resulted in significant strike action by many different groups of employees, with seemingly no end in sight.

Ultimately, this strike action was driven purely by the demand for better wages, better working conditions and associated living benefits. These demands came in response to the pressures people face with rising inflation. The long-term hope from employee groups was a rise in pay to help with daily expenses.

Strike action across 2023 and 2024 occurred, with walkouts staged and led by the unions representing the employees. On each occasion, strike action unfolded, and disruption was felt immensely across the Lufthansa network.

The strike action caused unrest in the operation. It thus forced Lufthansa to rethink its contractual obligations to staff to reflect what staff deemed a liveable and suitable wage for their labour.

Whether it was ground crew, pilots or cabin crew, several unions were engaged in a common goal. In response to these strikes, Lufthansa entered into intense negotiations with the unions that spanned several months.

As each month passed, Lufthansa would go on to agree on new deals with groups of its employees, including cabin crew, pilots, and so forth. While this would benefit employees, it would also mean that further strike action would be avoided.

However, while these agreements helped restore operational stability and avoid further immediate disruptions, they have substantially cost Lufthansa.

The increased wages also include benefits packages. As a result, Lufthansa’s operational expenses have risen, similar to those of many other airlines.

Ultimately, with employees on better wages, Lufthansa and all associates can move forward more positively in the future.

The Launch Of A New Airline

Lufthansa City Airlines, a new regional feeder airline under the Lufthansa Group, was announced in 2023.

This airline aims to enhance European connectivity by transporting passengers from smaller regional airports to Lufthansa’s main hubs, particularly Frankfurt and Munich.

The launch of this feeder airline is a strategic move by the Lufthansa Group to optimise its network and provide more options for onward international travel.

Lufthansa City Airlines will strictly focus on short-haul routes and will initially operate with Airbus A320 family jets before moving to the A220, for which it already has an order.

If executed correctly, City Airlines will look to streamline the Lufthansa operation to and from key European markets into Germany. The new carrier adds yet another element to the Lufthansa operation, which can be seen as adding complexity.

However, the Group believes it’s an initiative worth pursuing and will expand it significantly over the coming years as more aircraft arrive.   

Investments In More Airlines

Lufthansa Group, home to Lufthansa, will also pursue involvement with ITA Airways, the successor to Alitalia, to strengthen its presence in the Italian market.

Italy is a market where Lufthansa has struggled historically to secure a firm grip on the available market share amid high competition.

Lufthansa’s plan involves integrating ITA into its broader network, enhancing connectivity between Italy and key international destinations.

While set to benefit Lufthansa, the move will also improve ITA’s operational efficiency, service quality, and profitability through a streamlined operation.

Moreover, with Lufthansa Group having a greater say, there will be assets with lots of experience backing the newly formed airline.

Lufthansa aims to secure a stronger foothold in Italy by boosting ITA’s performance and increasing passenger traffic and market share. Based on analysts’ comments, this acquisition should see ITA benefit and eliminate some future over its long-term sustainability in the market.

Aircraft Delivery Delays

One of Lufthansa’s major challenges has been Airbus and Boeing’s ongoing supply chain issues.

These issues have delayed delivery of new aircraft, disrupting Lufthansa’s fleet renewal and expansion plans. The airline’s ability to operate more fuel-efficient and cost-effective aircraft has been hampered.

Particularly concerning for Lufthansa is Boeing’s inability to get the 777X certified. The airline’s CEO has commented on the delayed certification across several moments, stating that his forecast is for a 2026 entry into service.

While this is frustrating, based on the initial 2021/22 delivery estimate, broader impacts, such as financial results, must be considered.

Lufthansa betted on this widebody to replace older aircraft and has been unable to do so. Thanks to persistent delays, rising demand, and uncertainty, the company is not left with enough aircraft to cover the capacity and thus has to stunt growth and renewal efforts.

Nowadays, Lufthansa relies on older jets that, while reliable and broadly loved, would’ve been otherwise retired for more efficient aircraft to align with the transition plan.

Lufthansa Focuses On Older Aircraft

In the immediate short term, Lufthansa has brought back and extended the life of older quad-engine aircraft, which is seen as an absolute win for aviation enthusiasts.

Thanks to these decisions, the carrier has retained aircraft such as the Airbus A380, Airbus A340, and Boeing 747 to meet the high demand following the global pandemic.

While these aircraft provide the necessary capacity, they are significantly less fuel-efficient than newer twin-engine models. Higher operating and maintenance costs are all factors worth considering, and for Lufthansa, it is just one of the many complexities of being a major airline.

The company hopes delivery delays can be smoothed out, the 777X is certified, and other investments will play out as intended. If this all goes according to plan, which seems unlikely given the state of the industry, then the airline can chart an uninterrupted and solid course for growth.