Airlines around the globe are in a tough spot right now, given the impact of high oil prices on airline economics. It’s arguably even worse in Europe (than the United States), where oil prices are even higher, and there’s also more of a risk of an imminent jet fuel shortage.
In the case of Lufthansa, that’s hardly the carrier’s only problem, as it also has major labor relations issues, and between pilots and flight attendants, the airline is (mostly) grounded for five straight days, with no end to the dispute in sight.
Anyway, Lufthansa is taking decisive action, seemingly both to go into “emergency” mode in light of oil prices, but also to send a message to employees as labor issues rage on.
Lufthansa CityLine subsidiary shutting down shortly
CityLine is one of Lufthansa’s regional subsidiaries, and the intent is that the airline operates feeder flights for Lufthansa, primarily from Frankfurt (FRA) and Munich (MUC). The airline has a fleet of over two dozen planes, consisting primarily of Canadair CRJ-900s, but also of Airbus A319s.
While the plan had been for CityLine to shut down in 2027, the airline has moved forward that timeline significantly. As Lufthansa describes this, “in view of significantly increased kerosene prices, which have more than doubled compared to the period before the Iran war, as well as rising additional burdens from labor disputes, the implementation of the corporate strategy is being partially accelerated.”
As a first and immediate step, all Lufthansa CityLine planes will be “permanently removed from the flight program” as of Saturday, April 18, 2026. This is being done “in order to reduce further losses of the loss-making airline.” The airline explains that the CRJ-900s are “nearing the end of their technical operational capability and have comparatively high operating costs.”
Lufthansa claims that “discussions will be initiated with the employee representatives of Lufthansa CityLine GmbH regarding a reconciliation of interests and social plan.” All employees will be laid off, and Lufthansa emphasizes how CityLine employees have been offered jobs at other Lufthansa subsidiaries in the past (obviously with different, and probably lower, pay).
Lufthansa CityLine was supposed to end operations in 2027
Make no mistake, grounding a large fleet of jets that provide feed for Lufthansa’s network will have an impact on the operation, especially given how last minute this is. Lufthansa Group won’t have the capacity to cover all existing service with other aircraft, so expect some flight cancelations, with some routes possibly being cut, and definitely some frequency reductions.
The thought of just shutting down a subsidiary seems wild, but I think context is important here. Prior to this, the plan was to shut down Lufthansa CityLine in 2027, and largely replace it with a new feeder airline, Lufthansa City Airlines.
Wait, why would the airline group just shut down one subsidiary, and replace it with another? Well, that’s sort of Lufthansa Group CEO Carsten Spohr’s specialty. 😉 The slightly longer answer is that unions in Europe are strong and it’s quite easy for employees to go on strike (as we’re seeing now, and unlike in the United States), so when Lufthansa isn’t happy with the cost structure at one subsidiary, it just shuts it down and starts a new one.
Ultimately Lufthansa is just moving this forward by a year or so, which perhaps isn’t the craziest strategy when you consider the current reality. However, to shut down a subsidiary nearly overnight isn’t something you often see. This is clearly also a big middle finger to labor at CityLine, but then again, that’s nothing new.
Bottom line
Lufthansa has made the decision to shut down its CityLine subsidiary, and tomorrow will be its last day operating. This of course comes as a shock, since many people have tickets booked on this airline, only to likely soon find out their flight is canceled.
Lufthansa CityLine was supposed to shut down in 2027 and be replaced by Lufthansa City, but between high oil prices and the labor dispute, this timeline has all been moved forward.
What do you make of Lufthansa CityLine shutting down?
