The Lufthansa Group has today announced that it is expecting to receive reduced deliveries of aircraft through to 2023. The airline group won’t take more than 80 planes across the next few years. The measures come as the German flag carrier looks to cope with the fallout of the worst crisis to ever hit the aviation industry.
The current aviation crisis has hit airlines in different ways. Some have needed to cut staff, while others have kept their team for the time being. Some have stopped operating while others operated a skeleton service. However, one thing is constant, and that is that every airline has been affected. The larger the airline, the more significant the effect, and as such, the Lufthansa Group has taken an enormous hit.
80 deliveries over three years
Lufthansa recently received a €9 billion ($10.1 billion) bailout from the German government following a landslide approval by the airline’s shareholders. However, while the money ensures that Lufthansa doesn’t need to seek insolvency protection urgently, the airline realizes it can not carry on business as usual.
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As such, until 2023, the airline will only take delivery of 80 aircraft. There are 181 weeks until the end of 2023. This may seem like an insignificant fact, but its relevance will soon become apparent. With 80 aircraft to be delivered in that time, the Lufthansa Group will take delivery of around one aircraft per 2.3 weeks.
What changes for the Lufthansa Group?
In reality, it seems as though the airline’s delivery schedule won’t suffer that badly. We last touched on Lufthansa’s aircraft delivery timeline in October 2019. At the time, the airline said,
“the company will be welcoming a new airplane every two weeks on average for the next ten years.”
Now, doing the maths, it is clear to see that even though the airline has today said that accepting a maximum of 80 aircraft will reduce its investment volume for new aircraft by half, the average rate of delivery has not changed. Lufthansa will likely take fewer aircraft now, before ramping up the rate later to meet the 80 aircraft target.
But why could this be? It seems as though the October estimate of one aircraft every two weeks was based on accelerated deliveries at the start of the decade, with deliveries more spaced out at the end of the decade. However, spacing out the deliveries at the beginning of the decade, and not worrying about future deliveries has generated roughly the same result.
Why take new aircraft at all with such a large fleet?
The Lufthansa Group has a vast fleet of aircraft. Given its size and the reduced demand, you may be wondering why it should take delivery of any aircraft at all? Firstly, there are financial penalties attached to retiring aircraft.
Secondly, the group expects traffic to recover to 2019 levels by 2023. In this case, it would need a full fleet by then anyway. The new aircraft being delivered are much more economical to run than older aircraft, so the airline has simply retired its excess aircraft now. It will then replenish them with new incoming aircraft as needed, such as the Boeing 777X for which Lufthansa is the launch customer.
What do you make of Lufthansa’s reduced aircraft commitments? Let us know your thoughts in the comments!