Late last Friday, the Supervisory Board of Deutsche Lufthansa confirmed the news that the airline would be buying more new generation short- and medium-haul aircraft. Among the orders are A320neo and A321neo coming in at around 3 billion US dollars. So what does this signal for the airline. Let’s take a good look at the order. And of course, where the new aircraft will be used.
On 28 September, the Lufthansa Group approved the purchase of 27 short- and medium-haul aircraft. This breaks down as 24 Airbus A320neo and three A321neo. These had already been earmarked by the group. But Friday made it clear, Lufthansa had converted these intentions into into firm orders. This ups the total number of A320neo and A321neo on order with Airbus to 149 units. Thirteen of these are already in use at Lufthansa.
Why is Lufthansa buying up more A320neo and three A321neo?
For passengers and investors this is welcome news. The confidence it takes to commit to such an investment is a great sign. If it were another airline, such as Norwegian – I wouldn’t necessarily say it means all is well. But with the Aviation Group, generally the Germans don’t take huge risks without reason.
Investing in Lufthansa’s future
The total investment in these Airbuses amounts to a list price of around three billion US dollars. On the one hand, Lufthansa is ensuring a necessary fleet size as they replace older aircraft. On the other hand, its predicting growth and likely a European expansion. And this is based on expected positive market and earnings developments.
And part of this reason is European expansion. In the last couple of years, Lufthansa has been developing its ‘twin hub’ system. Essentially it has a ‘base’ in the economic capital, Frankfurt – but as the Bayern capital city, Munich, grows ever richer, Lufthansa has opened a second base there too. Munich recently added another runway and I’m sure Lufthansa are seeing opportunities there.
The New Engine Option models are expected to be delivered in five years time. Ten of the total will go to SWISS, the remaining 17 will be used by other flight operations within the AG. However, with these new planes, Lufthansa will continue to spread its bets and help support different manufactures. Some of the order will feature the Pratt & Whitney engines (PW1100G), the rest will have the LEAP-1A engines from CFM International. With this, both engine types will still be part of the Lufthansa Group plan. The ratio of Pratt & Whitney engines to LEAP-1A engines will be roughly, vaguely the same as it is now.
Hardly surprisingly, SWISS was quick to show their appreciation for the decision to equip the fleet with new aircraft. SWISS CEO Thomas Klühr remarked, “We are delighted that, in committing to these quieter and more efficient models of the tried-and-trusted Airbus A320 family, we can further advance the modernization of our European aircraft fleet,”
Quieter, more efficient aircraft
The now iconic neo wingtip, often referred to as ‘sharklets’ helps make the aircraft more aerodynamic and efficient, consuming up to 20% less fuel per seat-kilometer. Fuel is a hot topic right now and there’s no sign this is going to change in the next ten years. And just like the rest of the Lufthansa A320 Family aircraft, the new planes will be quieter too. The A320neo
has a noise carpet when taking off that is around 50 percent lower than similar aircraft. It’s also fitted with noise-reducing vortex generators. All in all this leads to a flight on which passengers can communicate more comfortably.