Lufthansa margins down to zero as it outlines recovery plan: what went wrong?

Lufthansa Airlines, the core carrier of Lufthansa Group, reported a zero operating margin over the past 12 months, compared to 8pc in 2019.

The airline faces challenges from a complex, ageing fleet, high staff costs, inflexible work rules, and rising air traffic control and airport fees.

A turnaround programme, launched in 2024, aims for a €2.5 bn profit improvement by 2028, with two-thirds from cost savings. Lufthansa plans to grow its Boeing 787 fleet to 24 aircraft by 2026 and phase out older A340s and 747-400s by 2027.

The Matrix Next Level reorganisation will coordinate European networks across Lufthansa’s subsidiaries by 2026 to reduce overlap.

Carsten Spohr shared: “We have not been pleased with the financial and operational performance over the last few years. [This] will be another transition year, but the turnaround has begun.”

Jens Ritter shared: “Without [fleet modernisation], we cannot restore competitiveness. A lot depends on it: fleet and crew productivity, maintenance costs, irregularity costs.”

Alex Irving shared: “Lufthansa is struggling to make money. We identify the main problem as one of productivity.”

Jens Ritter shared: “During every check, we find something new. The biggest problem is availability of spares. No airline can operate with 20pc reserves forever.”