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Lufthansa raises the stakes on profitability: major efficiency plan and new financial targets

By 2030: reduction of 4000 administrative jobs and over 230 new aircraft

The Lufthansa Group is pursuing its strategy and is targeting a significant increase in profitability. On the occasion of its Capital Markets Day in Munich, the Group presented its strategic planning and published new medium-term financial targets. In front of analysts and investors, the company reiterated the objective of adapting the Group’s organizational and operational structure to reorganize internal cooperation and responsibilities. The aim is to achieve closer, networked collaboration between Group functions and the airlines in order to exploit synergies and increase efficiency.

To create sustainable value for customers, shareholders and employees, the company is focusing on four strategic pillars under the Group umbrella:

- Maximizing synergies by consistently promoting integrated, networked cooperation within the Group.

- Focus on the network carriers: transformation programs and fleet renewal pave the way for higher profitability.

- More than 230 new aircraft by 2030, of which 100 are long-haul.

- The point-to-point business with Eurowings, the MRO (Maintenance, Repair and Overhaul) activity and the cargo business complete the Group’s broad portfolio.

A note reports that the network carriers –Lufthansa, Swiss, Austrian Airlines, Brussels Airlines and ITA Airways– will come even closer together thanks to adjustments to the organizational structure, processes and a more substantial integration. This will clarify responsibilities, promote collaboration and accelerate decision-making processes. The management of all commercial offerings at Group level (for example, short- and medium-haul network management for all hub airlines) will increase productivity and efficiency. The airlines also benefit from the steady and strong global demand for air travel. "This demand is being met by a limited supply due to ongoing delays in the supply chains of aircraft and engine manufacturers, which has an indirect positive effect on average revenues and load factors. The Lufthansa Group is playing an active role in consolidation in Europe and is demonstrating this impressively through the rapid integration of ITA Airways. Existing transformation programs, such as 'Turnaround' at the core Lufthansa Airlines brand, are being implemented consistently with the aim of significantly strengthening earnings performance", the note emphasizes. The largest fleet modernization in the company’s history is a key strategic element for future sustainability and increased profitability, in addition to a clear commitment to innovation, sustainability and premium quality.

The Lufthansa Group indeed plans to add more than 230 new aircraft by 2030, including 100 long-haul aircraft.

The point-to-point segment with Eurowings: after its restructuring and successful repositioning as a "value airline" for Europe, "accompanied by significant profit increases, Eurowings’ success story is set to continue. In particular, Eurowings is steadily expanding its leisure travel offerings. The tour operator Eurowings Holidays, spun off in spring 2025, is bringing innovation and dynamism to the tourism business, with the clear objective of growing rapidly and becoming one of the top ten German tour operators. Further momentum is provided by the largest fleet renewal in Eurowings’ history, which will lead to significantly lower operating costs. With the gradual integration of new short- and medium-haul jets (40 Boeing 737-8 MAX), Eurowings will operate one of the youngest fleets in European aviation. The MRO business with Lufthansa Technik remains a world market leader", the statement continues.

The new medium-term financial targets for 2028–2030 are:

- Adjusted EBIT Margin: 8–10 percent

- Adjusted Return on Capital Employed (Adjusted Return on Capital Employed): 15–20 percent

- Adjusted Free Cash Flow (Adjusted Free Cash Flow): over €2.5 billion per year

The Group also expects to reduce 4,000 administrative positions by 2030 through digitization, automation and process consolidation.

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AVIONEWS - World Aeronautical Press Agency
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