Lufthansa Slashes Flights and Closes Subsidiary as Fuel Costs Surge Amid Iran War

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 Frankfurt : Germany’s largest airline group Lufthansa has announced major cost-cutting steps, including closing its regional subsidiary and reducing flight capacity, as it struggles with rising fuel prices linked to the Iran conflict and ongoing labour strikes.

The airline said it will shut down its short-haul carrier CityLine on Saturday, with all 27 aircraft being removed from service. The company said the move is driven by sharply higher jet fuel costs and increasing pressure from repeated staff strikes.

Lufthansa also plans to reduce the number of aircraft operating on both long-haul and short-haul routes later this year to cut fuel consumption and improve efficiency.

The group said fuel prices have more than doubled compared to pre-war levels, and although most fuel is secured through long-term contracts, about 20% must still be bought at much higher market rates.

Chief Financial Officer Till Streichert called the restructuring a “painful step,” but said it was necessary due to geopolitical instability and rising costs. The company is also trying to relocate affected employees within other airlines in the group.

Analysts say removing older, less efficient aircraft could help reduce costs, but warn that ongoing strikes and labour tensions could worsen internal disputes.

The announcement comes as Lufthansa marks its 100th anniversary, with celebrations overshadowed by staff protests and widespread flight disruptions.