FRANKFURT (dpa-AFX) - Lufthansa is thinning out its flight schedule because prices for airline tickets are under pressure worldwide. The reason for this is the rapid growth in flight offerings in recent months, which has increased competition and given customers more choice. Chinese airlines are putting pressure on prices in economy class, especially in the direction of Asia, the Group reports. Group CEO Carsten Spohr speaks of a "normalization" of prices, which had risen significantly at the restart after the corona pandemic.

First and foremost, the core company Lufthansa faces the challenge of adapting its flight offering to the changed demand with many more holidaymakers on board. The crane airline is more dependent on the Asian market and business travelers, who have not fully returned after the coronavirus pandemic.

Cost-cutting program to help

According to CFO Michael Niggemann, the Group's largest company by far accounts for 60 percent of capacity, but only 40 percent of the operating result. "Unfortunately, Lufthansa Airlines is clearly falling behind." A strict cost-cutting program and the transfer of short and medium-haul flights to other, more cost-effective flight operations are intended to change this.

The company has announced that it intends to use the 50 or so leased aircraft in future, primarily for seasonal peaks. Within the Group, the new subsidiaries City Airlines and Discover Airlines are to grow at the expense of "Lufthansa Classic" over the next few years. It is theoretically conceivable that Lufthansa, like its competitor British Airways, will only offer long-haul flights in the distant future, said Niggemann. The feeder flights would then have to be flown by other airlines.

Flights from Munich and Frankfurt on the list of cuts

Most of the flight cancellations affect the Munich hub. There will already be fewer Lufthansa connections to Chicago, Los Angeles and San Francisco from the end of July. Flights to Denver will be suspended for several weeks from February 17, 2025, as previously to Washington (8.1.-28.2.) and Osaka, Japan (6.1.-9.2). Airbus A350s will be used to Los Angeles in January and February instead of the large A380s. In Frankfurt, individual flights to Los Angeles from the end of July are on the cancelation list. In addition, Denver will not be served from January 8 to February 15. The Frankfurt-Munster and Munich-Tallinn flights have been completely removed from the winter timetable, which will apply from the end of October.

After a difficult start to the spring, the Lufthansa Group made significantly less profit than a year earlier. The company cited strike costs of around 100 million euros and an average 5.3 percent drop in ticket sales as reasons for the weak second quarter. Overall, the MDax group generated a consolidated profit of 469 million euros in the second quarter (2023: 881 million euros), as reported in Frankfurt. The company increased its quarterly turnover by seven percent to 10 billion euros. The number of flights grew by 11 percent year-on-year. For 2024 as a whole, Spohr confirmed the target of flying 92% of the pre-pandemic capacity.

Maintenance subsidiary as a "jewel"

The main loss-maker was the core company Lufthansa, which posted a loss of 427 million euros after six months and is therefore a good half a billion behind the same period last year. The company is also suffering from delayed deliveries of new aircraft for which, for example, pilots have already been trained. Including higher fuel prices and lower freighter costs, Lufthansa is losing tens of millions per year for every long-haul aircraft not replaced by a new model, said Niggemann. Lufthansa actually wants to remove four inefficient aircraft types with a total of 50 aircraft from the fleet by 2028.

In contrast, business at the maintenance subsidiary Lufthansa Technik was at a record level, increasing its turnover by 18 percent to 1.9 billion euros in the first half of the year. Spohr describes the subsidiary, which was recently on the verge of a partial sale, as a "jewel in the portfolio". The company also expects profits for the other airlines such as Swiss, Austrian, Brussels and Eurowings to be at or above the previous year's level.

As previously reported, the Group is now only expecting an operating profit of between 1.4 and 1.8 billion euros (adjusted EBIT) for the year as a whole, having previously stated a target of around 2.2 billion euros. In the second quarter, the operating profit amounted to only 686 million euros after 1.1 billion euros in the same period of the previous year. Due to the problems at the core company, the Group also expects operating profit to fall in the current quarter after 1.5 billion euros in the same period last year./ceb/DP/mis