Lufthansa Eyes Domestic Flight Cuts

Lufthansa is considering cutting approximately 100 domestic flights per week due to increased taxes, fees, and lower passenger numbers, rendering some routes unprofitable. The airline's CEO, Carsten Spohr, has indicated that further cuts may be necessary without a reduction in these financial burdens.

Key Points

Lufthansa is reviewing around 100 domestic flights for potential cancellation.
The airline cites increased taxes and fees as key factors impacting profitability.
Passenger numbers on domestic routes have not recovered to pre-pandemic levels.
Business travel decline and modal shift to rail are contributing factors.
Routes like Munich to Münster/Osnabrück and Munich to Dresden are specifically mentioned as under review.
The potential cuts could take effect as early as next summer.

Background

The airline industry, including Lufthansa, has been grappling with various challenges in recent years. The COVID-19 pandemic significantly impacted air travel, leading to a decline in passenger numbers. While international flights have largely recovered, domestic routes have faced a slower recovery. This is attributed, in part, to a shift towards remote work and video conferencing, reducing the need for business travel. Simultaneously, governments have been increasing taxes and fees on air travel, often framed as measures to promote more environmentally friendly modes of transportation like trains. This combination of factors has put significant financial pressure on airlines operating domestic routes, leading to route profitability issues. Airlines are thus looking for ways to optimize their operations and reduce costs, including the potential streamlining of their domestic flight networks.

Numbers & Facts

Lufthansa: The airline group considering the flight cuts.
100: Approximate number of domestic flights per week under review.
Carsten Spohr: CEO of Lufthansa Group.
2019: Year from which state location costs have reportedly doubled.
Routes under review: Munich to Münster/Osnabrück, Munich to Dresden.
Next Summer: The period when the cuts could be implemented.

Assessment

The potential reduction in domestic flights by Lufthansa has implications for several stakeholders. For passengers, it could mean fewer flight options and potentially higher prices on remaining routes. Businesses located in regions served by the affected routes could experience difficulties and increased travel costs. For Lufthansa, it reflects a strategic effort to optimize its network and focus on more profitable routes. The German government faces a trade-off between raising revenue through aviation taxes and fees and supporting the domestic airline industry. From an environmental perspective, the cuts could lead to a shift towards other modes of transport, like rail, potentially reducing carbon emissions, provided the alternative transport options are available and utilized.

Outlook

Lufthansa's decision will likely depend on ongoing discussions with the government regarding aviation taxes and fees. The airline will also be closely monitoring passenger demand and overall economic conditions. Other airlines operating in Germany may face similar pressures, potentially leading to further adjustments in domestic flight networks. The outcome of this situation could shape the future of domestic air travel in Germany, with potential implications for regional connectivity and the competitiveness of the German economy. The trend of increased taxes and fees on air travel is likely to continue in Europe as governments seek to promote sustainable transport and fund environmental initiatives. Expect lobbying from the aviation industry.

Source: https://www.tagesschau.de/wirtschaft/unternehmen/lufthansa-inlandsfluege-102.html