I’m not sure this negotiating tactic is quite the flex that Lufthansa management thinks that it is, but goodness, it sure makes for an interesting topic…
Lufthansa is trying to prove how unprofitable it is
Lufthansa is the flagship airline of Lufthansa Group, and the company continues to be profitable. When financial results of the airline group are revealed, exact details of the breakdown in financial performance between subsidiaries is often limited. In other words, how is Lufthansa doing vs. SWISS, Austrian, Brussels, Eurowings, etc.?
At the moment, Lufthansa is in contentious negotiations with its pilots over pensions, and a possible strike is looming. Along those lines, aeroTELEGRAPH reports on how Lufthansa management is using its poor financial performance in these negotiations, in order to justify not giving in to demands of pilots.
While Lufthansa Group reported a €149 million profit for the first half of 2025, the company claims that Lufthansa is dragging the company down significantly. Lufthansa CEO Jens Ritter claimed that the core Lufthansa brand lost €274 million in the first half of 2025, while the entire Lufthansa division (including CityLine, City Airlines, Discover, and Air Dolomiti), recorded a loss of €307 million over that period.
Ritter also stated that “without structural changes, there will be no prospects for Lufthansa Airlines.” Lufthansa has dozens of new long haul jets expected to be delivered in the coming years, and he claimed that “we cannot afford that at the moment.”
When questions came up as to whether accounting was being manipulated to make Lufthansa’s situation look worse, Ritter stated that “no one would gain an advantage by portraying Lufthansa Classic negatively,” and that “on the contrary, we are the core of the group, the largest and most important airline.”
Meanwhile Lufthansa Group CEO Carsten Spohr indicated that Lufthansa’s cost disadvantage is so great that there’s no growth taking place there — “if Lufthansa Airlines doesn’t work, we won’t be able to save it with the Billionaires Club or with ITA or Swiss” (“Billionaires Club” refers to Eurowings, Lufthansa Cargo, and Lufthansa Technik, which generate around €1 billion in profits).
Is this the flex that Lufthansa management thinks it is?
Okay, so where do we even begin here? Of course management’s strategy in negotiating with unions is nothing new here — “we’re poor, we can’t afford these additional labor costs.” Fair enough.
However, the core of what they’re saying is true — Lufthansa Group is making money, but the carrier’s flagship airline is losing a significant amount of money. Admittedly there are a lot of factors in recent years that have been incredibly challenging for Lufthansa:
There are some areas where I feel bad for Lufthansa management, because the company couldn’t have predicted that the 777X would be the mess that it has been. At the same time, there are plenty of things within management’s control, like the absurd decision to introduce Allegris, which is insanely complex, while still being sort of average.
Like, the carrier’s new business class product is from three different seating manufacturers, a weight needs to be installed on SWISS A330s to balance out the weight of first class, Lufthansa 747-8s will be equipped with two different kinds of business class seats, etc.
More fundamentally, Lufthansa’s issue is that it’s a shell of its former self. Back in the day, Lufthansa was known for being one of Europe’s highest quality and most reliable airlines. However, look at the state of the fleet now. I mean, a vast majority of the carrier’s long haul business class fleet doesn’t have direct aisle access, and the airline is flying outdated aircraft, mostly.
Beyond that, Lufthansa’s focus in recent years has been on everything except the core business. Spohr’s specialty is figuring out any way possible to create new subsidiaries in order to minimize labor costs. I understand the challenging economics of European labor agreements, but of course the core airline won’t be successful if this is how it’s approached.
It’s just such a contrast to look at the glow-up that Air France has seen in recent years, where we’ve seen massive improvements in the passenger experience, efficiency, etc., and to compare that to the lack of progress at Lufthansa.
So it’s mighty convenient for Lufthansa management to now say “well we can’t afford these increased pensions because we’re not making money,” when the core of those losses seem to be due to mismanagement, over anything else. Last I checked, Lufthansa’s top executives are still in their roles, and are still getting paid pretty nicely despite Lufthansa’s lack of performance.
Bottom line
Lufthansa is in contentious negotiations with its pilots over pensions. Management’s defense is that Lufthansa is so unprofitable that it can’t possibly afford to increase pensions, and for that matter, can’t even afford the new planes it has on order.
While the airline business is incredibly difficult, it sure seems to me like so many of Lufthansa’s issues are self-induced. Yet there has been no accountability for management. What has long amazed me about Lufthansa Group management (and in particular, Spohr) is how they talk about Lufthansa Group’s issues almost as if they’re independent, third party observers, and that nothing is within their control.
As someone who has been flying Lufthansa all my life, what stands out to me is how little the airline has evolved. It’s quite a contrast to carriers like Air France and even *gasp* British Airways.
What do you make of this Lufthansa profitability issue?