In its first restructuring plan, Lufthansa has decided to immediately decommission 32 of its aircraft. This includes six A380s, seven A340-600s, three A340-300s, five 747-400s, and 11 A320s. This move comes as Lufthansa predicts that the industry will take a while to get back to pre-pandemic levels once again.
Besides cutting down its fleet, Lufthansa is also planning to shut down its Germanwings subsidiary. Eurowings will also see broad reductions in capacity with more aircraft phased out (10 A320s) and routes cut.
Phasing out less efficient aircraft
Lufthansa’s immediate plans include removing less-efficient aircraft as soon as possible. The airline originally planned to slowly phase out these aircraft, with the A380s set to go in 2022. However, the coronavirus crisis has forced the airline to ditch these less-efficient jumbo jets early, largely due to the lack of demand for long-haul travel. The airline is also planning to phase out some of its older A320s to make way for the newer A320neo and A321s.
This plan hardly comes as a surprise. Airlines who operate the older 747s and A340s, such as Qantas and Iberia, have also announced plans to retire the planes early. In a time with negligible demand, it makes no sense to operate old, large aircraft, which are more expensive and less environmentally friendly, when newer aircraft can serve the purpose much better.
Lufthansa will be a smaller airline
While these cuts seem small for a carrier of Lufthansa’s size, this decision comes from a belief that Lufthansa will be a smaller airline when this pandemic ends. These cuts account for around 10% of the airline’s fleet and target its long-haul and leisure operations. The reduction in fleet marks the airline’s first permanent capacity cut and could be the beginning of larger scaling down for the vast group.
The Lufthansa Group includes a number of significant airlines such as SWISS, Brussels, Eurowings and Austrian. All of these airlines will also see a reduction in fleet and capacity in line with the group’s vision for the post-virus world. Lufthansa has already announced the shut down of Germanwings, and SWISS plans to defer short-haul plane deliveries to conserve capital. The coming weeks will likely see more airlines in the Lufthansa group downsize.
An uncertain future for airlines
Lufthansa’s decision will likely elicit a debate about the long-term impact of the virus. Airlines such as Ryanair are keeping their planes in service, waiting for the day they all are in the sky once again. Lufthansa represents the other side of the coin, permanently reducing capacity early on. Only time will tell us which airline’s strategy will pay off.
The coronavirus has forced huge airlines across the board to retire their less-efficient planes, and Lufthansa only seems to be following the trend. This move by Lufthansa could the first of many as the virus slowly reaches its peak in Europe.
This decision will likely have an impact on hundreds of staff and passengers worldwide, one which we’ll closely be watching. The coming few weeks will also likely see more airlines from the Lufthansa Group reduce their capacity and permanently become smaller.
What do you think the Lufthansa Group should have done? Is this the new normal for aviation? Tell us below.