Summary
- The chief executive of Lufthansa Group publicly expressed frustrations with aircraft delivery delays.
- The group has planned to receive up to 30 new aircraft in 2024, but continues facing ongoing delivery delays and uncertainties.
- The group has also experienced issues with the PW1100G engine, which has further impacted its capacity in the near-term.
The chief executive of the Lufthansa Group, comprised of several European airlines, has detailed how much the recent aircraft delivery delays from Airbus and Boeing have significantly impacted the group’s operations, noting that no aircraft has been delivered on time, resulting in financial losses.
Around $540 million a year
Speaking at the business press club in late June, Carsten Spohr, the chief executive officer (CEO) of Lufthansa Group, said that aircraft delivery delays could cost Lufthansa as much as €500 million ($540 million) per year, with the executive adding that no aircraft has arrived on time, according to a report by Reuters.
Photo: Joe Kunzler | Simple Flying
On multiple occasions, Lufthansa has stated that it chose to reactivate its Airbus A380 following the pandemic due to high demand and due to aircraft delivery delays in the long-haul segment. The German airline began flying its fifth Airbus A380 in March, with two more A380s being reactivated in 2024 and 2025.
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Continous aircraft delivery warnings
When the group announced its Q1 2024 results, which were heavily impacted by multiple strikes by labor unions that represent the group’s employees, Lufthansa Group also said that it would receive up to 30 new aircraft in 2024, warning that there have been repeated warnings about further delivery delays.
“However, due to production problems and delays in certification, there have been repeated postponements in planned aircraft deliveries throughout the industry, which means that the company’s capacity forecast is still subject to uncertainties despite the reduction already made compared with the original assumption.”
Ch-aviation data showed that seven airlines within the Lufthansa Group, including Austrian Airlines, Brussels Airlines, Lufthansa, Lufthansa City Airlines, and Swiss International Air Lines (SWISS), are awaiting 250 aircraft deliveries, which includes airframes that were acquired on the second-hand market.
Photo: Austrian Airlines
Judging how much the aircraft delivery delays have affected the group was hard, especially since in Q1 2024, its employees’ strikes have significantly affected its capacity growth. Year-on-year (YoY) capacity, measured in available seat kilometers (ASK), has grown by 12%.
The group emphasized that the operating and financial performance of its passenger airlines have deteriorated significantly, “in particular due to the effects of the widespread strikes by various employee groups within the Group and at system partners.”
As a result, unit revenues dropped by 6.3% YoY due to lower yields, increased compensations paid to passengers, and declining income from the leasing of belly capacity to Lufthansa Cargo. Lufthansa Group detailed that its flight delays and compensations during the three-month period amounted to €98 million ($105.9 million), compared to €34 million ($36.7 million) in Q1 2023.
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Manufacturers’ issues
In addition to both Airbus and Boeing struggling with aircraft delivery delays, Pratt & Whitney, the makers of many aircraft engines, including the PW1100G, one of the two power options for the Airbus A320neo family, has struggled with maintenance capacity. The issue has been exacerbated after the engine maker announced the accelerated inspections and removals of the PW1100G due to a manufacturing issue.
Photo: Airbus
Lufthansa Group outlined that it has continued to face issues related to the engine. However, the group also added that it has been growing increasingly confident about the negotiations with Pratt & Whitney over the compensation for the financial losses. Ch-aviation data indicated that the group has 97 PW1100G-powered aircraft, 13 of which are currently stored, while 23 are in maintenance.
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