Lufthansa has announced the permanent closure of its regional subsidiary CityLine, citing sharply increased kerosene prices driven by the ongoing crisis in the Middle East. The decision, effective April 18, will see all 27 operational aircraft removed from the flight programme as part of an accelerated cost-cutting strategy.
The German carrier stated that the Canadair CRJ aircraft used by CityLine are approaching the end of their technical operational life and have comparatively high operating costs. The move aims to reduce further losses at the loss-making subsidiary, which was founded in 1963, just five years after Lufthansa itself.
In addition to the CityLine closure, Lufthansa is reducing its long-haul capacity. The last four Airbus A340-600s will leave the fleet in October, bringing an end to the aircraft type's service at the airline. The company noted that while around 80% of its fuel consumption is hedged against crude oil prices, the remaining 20% must be purchased at significantly elevated market rates, prompting a 10% reduction in fuel requirements.
Till Streichert, chief financial officer of Lufthansa Group, described the package of fleet and capacity measures as unavoidable in light of the sharply increased kerosene costs and geopolitical instability. He said the prospective removal of CityLine had been identified as part of strategic development prior to the current crisis, but that the crisis forced earlier implementation, describing it as a painful step for colleagues.
The airline has offered transfer options to staff, with ground employees already placed at newly founded Lufthansa Aviation GmbH. Cockpit and cabin crew were offered employment at Lufthansa City Airlines with comparable compensation conditions, including compensation payments for any differences in working conditions.
