Lufthansa becomes first major global carrier to ground planes over jet fuel costs

Lufthansa, German flagship carrier has become the first major airline company to ground planes due to increase in jet fuel price, amid Iran ⁠war.

Lufthansa cited ongoing labor disputes behind the decision that came a day after celebrating the group’s 100th anniversary.

The Iran war has has seen increase in jet fuel prices soaring, forcing airlines to raise fares, reduce growth plans and rethink forecasts.

In a first step starting on Saturday, Lufthansa will permanently remove 27 of its smaller regional jets, known as CRJs, operated by Lufthansa subsidiary CityLine, to further reduce losses at the loss-making airline, according to a statement.

These planes are at the end of their operational capabilities and are comparatively more expensive to operate.

In a second phase starting at the end of October, six long-haul jets from Lufthansa’s core brand are to follow, namely four Airbus A340-600s and two Boeing 747-400 jumbo jets.

In addition, Lufthansa plans to remove around five medium-haul aircraft from its fleet.

The company cited soaring kerosene prices and the costs from ongoing labor disputes as reasons for the cuts. Particularly inefficient aircraft would be taken out of operation early so that less kerosene would have to be bought on the open market, it said.

Based on the crude oil price, around 80 percent of the kerosene consumption of Lufthansa Group’s passenger airlines is hedged, which is above average, according to the company.

Till Streichert, Chief Financial Officer said the measures were unavoidable. Cuts that were planned anyway were being brought forward, he added. “The current crisis is now forcing us to implement this measure earlier.”

Services on long-haul and short-haul routes in the rest of Lufthansa’s network will also be reduced after the summer to make savings, the group said.

The company said its goal is to enable CityLine crews to find jobs within the Lufthansa Group. However, the pilots’ union Vereinigung Cockpit and the cabin crew union UFO say the company’s efforts are insufficient.