Lufthansa CEO Plans to Revive ‘Problem Child’ Airline by 2026, Report Says

Lufthansa’s Ambitious Revival Plan by 2026

By Ilona Wissenbach and Joanna Plucinska

FRANKFURT – Lufthansa is focused on revitalizing its core airline by 2026, as it faces greater challenges than its regional competitors due to rising costs and extended delays in Boeing plane deliveries, according to the company’s CEO.

Carsten Spohr referred to the Lufthansa airline as the German group’s "problem child," emphasizing that its turnaround is crucial for the parent company’s overall success. "It’s a clear goal that the Lufthansa airline will once again be our flagship for its 100th birthday in 2026," he stated during a press briefing.

This announcement comes as investors express concern ahead of the group’s third-quarter results, which are set to be released on October 29, and amid a 10% decline in the company’s shares over the past six months.

With carriers such as Austrian Airlines, Swiss, and Eurowings also under its umbrella, Lufthansa has issued two profit warnings this year. The airline is grappling with escalating wage costs, pressures on ticket pricing, and a challenging aviation market that hinder recovery efforts.

The ongoing delays in the delivery of essential new aircraft have exacerbated these problems, with Spohr noting that Lufthansa has been affected "disproportionately" by these setbacks. "We found ourselves caught at exactly the wrong time regarding fleet modernization," he remarked.

Currently, Lufthansa is awaiting the arrival of 41 new Boeing aircraft, with deliveries of the 777x jets already facing extensive delays. This situation has compelled the airline to continue operating older Airbus planes that were intended for retirement before the pandemic, limiting its ability to expand on lucrative routes and improve efficiency since newer aircraft consume less fuel. "We’re flying 23 aircraft that we didn’t want to fly anymore," Spohr added.

Other European airlines, including Ryanair, have also felt the impact of Boeing’s delivery delays.

Path to Financial Stability

To restore its fortunes, Spohr indicated that investing in international growth, including its stake in the Italian airline ITA Airways, could be a key strategy. Lufthansa has faced tough competition on its transatlantic and Asian routes, recently deciding to cancel its Frankfurt to Beijing flights as Chinese carriers increased their capacity.

Domestic airlines are gaining market share on international routes due to foreign airlines being dissuaded by sluggish Chinese travel demand, rising costs, and longer flight times necessitated by avoiding Russian airspace amid the ongoing Ukraine conflict.

Looking ahead, Lufthansa aims to expand into new regions, particularly Latin America and Africa, where it could potentially have a competitive edge. Establishing new hubs with lower operating costs, such as in Italy, is also seen as a promising opportunity to enhance revenue and improve profit margins.