Germany's Lufthansa to Ground Flights Over High Fuel Costs, Strikes

‍DALLAS — Lufthansa (LH) today said that it is shutting down its Cityline (CL) regional subsidiary. The carrier has been hit by a lengthy, ongoing labor dispute that has been aggravated by high fuel costs. 

The labor dispute has forced hundreds of cancellations across Germany. German media say that almost all employees are being placed on leave.

Fuel costs have been pushed up globally by higher crude oil prices due to the war in Iran.

Handelsblatt, citing internal information, reports that Lufthansa Cityline’s operations are to be halted effective immediately.

“After extensive review, we had to make the decision to temporarily suspend Cityline flight operations until further notice,” Handelsblatt quotes from an internal memo. The report says that no further flights will be operated by Cityline for the foreseeable future.

Bild says that the ongoing labor problems are posing major challenges for the group. Halting CL operations could help reduce further losses at the struggling airline.

Cityline is a regional airline subsidiary of Lufthansa based in Munich. It primarily operates flights from European airports to the major hubs in Frankfurt am Main(FRA) and Munich (MUC).

The recent labor disputes forced the cancellation of around 3,000 flights at Frankfurt Airport alone.

In a statement, the airline said, "In view of significantly increased kerosene prices, which have more than doubled compared to the period before the Iran war, as well as rising additional burdens from labor disputes, the implementation of the corporate strategy is being partially accelerated."

"As a first, immediately effective step, starting the day after tomorrow, the 27 operational aircraft of Lufthansa Cityline will be permanently removed from the schedule to reduce further losses at the loss-making airline.

Labor dispute, A340, Jumbo withdrawls

The airline is embroiled in an intractable wage dispute with the pilots' union, Vereinigung Cockpit, over company pension plans. Lufthansa pilots are striking because of a classic labor standoff: pilots want better pensions, higher pay, and stronger employment protections.

Lufthansa also said it would withdraw four older long-haul Airbus A340-600s from its core brand fleet at the end of its summer flight schedule. The winter flight schedule will see the number of short- and medium-haul flights reduced by five aircraft.

An update on X from Kris Van Kleave states that two Boeing 747-400s will also be grounded. "The final farewell to this aircraft type is planned for next year."

The pilots are staging a two-day walkout until Friday. Thursday is also the second day of a strike by cabin staff in a push for better working conditions amid a broader labor dispute.

German media say that a mediation attempt between Lufthansa and the pilots' union Vereinigung Cockpit collapsed recently after both sides failed to agree on the terms of negotiation.

Strikes are expected to continue into Friday for core Lufthansa operations, including Lufthansa Cargo and CityLine.