The Lufthansa Group, one of Europe’s largest and best-known airlines, is planning a conscious reduction in its expansion strategy for 2025. After a challenging 2024 marked by fleet bottlenecks, a difficult business environment in Asia and persistently weak bookings from business travelers, the group has decided to significantly limit the growth of its core brand Lufthansa Airlines. Instead of aggressive expansion, “very measured and moderate growth” of just 3.5 percent is targeted. This decision is part of a comprehensive efficiency program called “Turnaround”, which aims to increase the company’s profitability and ensure operational stability.
2024 proved to be a year full of challenges for the Lufthansa Group. Like numerous other airlines, the German airline is also feeling the ongoing effects of global economic uncertainty. Business in Asia in particular developed differently than expected. The sometimes difficult geopolitical situation, the effects of the pandemic and the associated changed travel patterns in the region left a clear mark on the figures. The Asian business, which was one of Lufthansa’s most important sources of income before the pandemic, did not produce the hoped-for results.
In addition, the business travel segment continued to fall short of expectations. In many areas, the booking situation from business travelers was subdued. Although the market recovered in the final months of 2024, the momentum was not yet sufficient to achieve the expected gains. These factors had a noticeable impact, especially at a time when Lufthansa was faced with a shortage of supplies in several markets and the need to renew its fleet.
Lufthansa announced that its operating profit forecast in 2024 would be below expectations. The final result for the year will be published on March 6, 2025, creating further uncertainty regarding financial performance. In this context, attention is focused on the planned measures with which the airline would like to overcome the current difficulties.
The “turnaround”: efficiency instead of expansion
In response to these challenges, Lufthansa has launched a far-reaching efficiency program called “Turnaround”. The aim of this program is not only to secure profitability, but also to strengthen the company’s market position in the long term. One of the central measures of the program is to significantly limit the planned growth for the years 2025 and beyond.
Lufthansa Airlines, the largest brand within the Lufthansa Group, will only moderately expand its flight offering in 2025. The targeted increase of just 3.5 percent should help the airline to concentrate on quality and stability instead of getting into new difficulties due to rapid growth. This step is described as a kind of “adaptation to reality” that is intended to stabilize the entire operational operation.
According to Jens Ritter, CEO of Lufthansa Airlines, growth in 2025 should reach 90 percent of the pre-crisis value in 2019. The focus is not on sheer expansion, but rather on a targeted and sustainable improvement in operational efficiency and customer satisfaction. This strategy has become increasingly relevant in recent years as the aviation industry not only struggles with the effects of global crises, but also faces challenges from increasing competitive pressure and rising costs.
Fleet bottlenecks and competition
Another critical factor in Lufthansa’s planning is the fleet problem. The Lufthansa Group was also faced with bottlenecks in its aircraft fleet in 2024. Delivery delays and ongoing difficulties in maintaining and delivering new machines placed a significant burden on the company. The fleet renewal, which is aimed at greater efficiency and an improved cost situation, could only be pushed forward.
The question now arises for Lufthansa as to how it will deal with this situation. On the one hand, the airline is forced to optimize its fleet capacity and rely on existing aircraft to meet demand. On the other hand, the modern orientation of the fleet is seen as one of the key strategies for the coming years in order to remain competitive in the long term. Fleet bottlenecks also make the planned growth more difficult, which means a further restriction on the expansion of the Lufthansa core brand.
Prospects for 2025 and beyond
Despite the challenges, Lufthansa remains optimistic that the desired stability can be achieved in 2025. The lower growth rate and the efficiency program are measures that aim to achieve sustainable development while at the same time removing short-term financial pressure from the aviation industry. Experts assume that Lufthansa will be able to serve the market with a healthy mix of moderate growth and stable profitability in the coming years.
The decision to slow down growth could also prove beneficial in the long term, especially given the unpredictable market developments. Compensating Lufthansa’s fleet and flight offering primarily reduces the risk of offering too much capacity in an increasingly competitive market. The focus on stability and efficiency could put the company in a good position for the years after 2025, when global economic conditions and travel demand continue to normalize.
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