Lufthansa has permanently shut down its regional subsidiary airline CityLine, citing 'significantly increased kerosene prices' amid the global oil crisis triggered by the Iran war. The decision, effective April 18, removes all 27 operational Canadair CRJ aircraft from the flight program to stem further losses.
Immediate Fleet Reduction
The German carrier stated that the CRJ aircraft are nearing the end of their technical operational capability and have comparatively high operating costs. Alongside the CityLine closure, Lufthansa is reducing its long-haul capacity, with six intercontinental aircraft to be removed by the end of the summer schedule. The last four Airbus A340-600s will leave the fleet in October, ending the era of this aircraft type at Lufthansa.
Fuel Hedging and Cost Pressures
The Lufthansa Group has hedged around 80% of its kerosene consumption against crude oil prices. However, the remaining 20% must be purchased at significantly increased market prices. To mitigate costs, the airline will reduce this expensive portion of fuel requirements by approximately 10 percent.
Till Streichert, chief financial officer of Lufthansa Group, said: 'The package for accelerated implementation of fleet and capacity measures is unavoidable in light of the sharply increased kerosene costs and geopolitical instability. The goal is to focus our short- and medium-haul platforms more clearly and make them more competitive. We had already identified the prospective removal of CityLine as part of our strategic development. The current crisis is now forcing us to implement this measure earlier. This is a painful step, particularly for our colleagues at CityLine.'
Employee Transfers
Ground staff have already been employed at the newly founded Lufthansa Aviation GmbH, while cockpit and cabin crew were offered transfer options at the turn of 2024/2025 to Lufthansa City Airlines with multi-year comparable compensation. Any differences in working conditions were to be offset by compensation payments. CityLine, founded in 1963, just five years after Lufthansa, has now ceased operations.
