Lufthansa to cut capacity as fuel costs surge amid Iran war

German flag carrier Lufthansa said Thursday it will cut costs as it faces sharply higher fuel prices and pressure from labor disputes.

The airline plans to reduce capacity, retire older aircraft early and shift more planes to its lower-cost unit Discover Airlines.

Fuel costs have more than doubled compared with levels before the Iran war, it said in a statement.

As an immediate first step, Lufthansa CityLine’s 27 operational aircraft will be permanently removed from the flight program starting April 18. Lufthansa said the Canadair CRJ aircraft are nearing the end of their technical operating life and have relatively high operating costs.

Moving forward, Lufthansa will reduce long-haul capacity by six intercontinental aircraft at the end of the summer flight schedule. The last four Airbus A340-600 jets will leave the fleet in October, while two Boeing 747-400s will also be grounded from October for the winter season.

During the 2026-2027 winter flight schedule, Lufthansa will take a third step by cutting additional short- and medium-haul capacity at its core brand, equivalent to five aircraft.

Lufthansa also said it will accelerate the allocation of nine additional Airbus A350-900 aircraft to Discover Airlines under its medium-term fleet planning.

Chief Financial Officer Till Streichert said the package was unavoidable given the sharp rise in kerosene costs and geopolitical instability.

Lufthansa said the measures would generate significant savings on fuel costs by removing inefficient aircraft from service early and reducing the unhedged share of fuel purchases.

The group said around 80% of the fuel consumption of its passenger airlines is hedged against crude oil prices, but the remaining 20% still has to be bought at significantly higher market rates.

The latest measures would reduce the expensive unhedged portion by around 10%.

In addition to fleet and capacity changes, Lufthansa said it had introduced new savings targets covering hiring, internal events and external consulting, supporting its existing goal of cutting 4,000 administrative positions across the group by 2030.

On Thursday, hundreds of flights were canceled as Lufthansa flight crews continued a strike into its fourth day. Pilots and flight attendants walked out together, disrupting operations at Lufthansa, Lufthansa Cargo and regional subsidiary Cityline.