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, which was marked by fleet bottlenecks, a difficult business environment in Asia and persistently weak bookings by business travelers, the group has decided to significantly limit the growth of its core brand Lufthansa Airlines. Instead of aggressive expansion, the company is targeting "very measured and moderate growth" of just 3,5 percent. This decision is part of a comprehensive efficiency program called "Turnaround", which aims to increase the company's profitability and ensure the stability of operations.
2024 proved to be a year full of challenges for the Lufthansa Group. Like many other airlines, the German airline group felt the ongoing effects of global economic uncertainty. Business in Asia in particular was more difficult than expected. The sometimes difficult geopolitical situation, the effects of the pandemic and the associated changes in travel patterns in the region left clear marks 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 for business travelers was subdued. Although the market recovered in the last months of 2024, the momentum was not yet sufficient to achieve the expected profits. These factors had a noticeable impact, especially at a time when Lufthansa was faced with a shortage of supply and the need to renew its fleet in several markets.
Lufthansa announced that its operating profit forecast for 2024 would be below expectations. The final result for the year will be published on March 6, 2025, which creates further uncertainty regarding the financial development. In this context, attention is focused on the measures planned by the airline 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 program's key measures is to significantly limit the planned growth for 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 is intended to help the airline concentrate on quality and stability instead of getting into new difficulties due to too rapid growth. This step is described as a kind of "adjustment to reality" that is intended to stabilize the entire operational business.
According to Jens Ritter, CEO of Lufthansa Airlines, growth in 2025 is expected to reach 90 percent of the pre-crisis level of 2019. This means that the focus is not on sheer expansion, but 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 is not only struggling with the effects of global crises, but is also facing challenges from increasing competitive pressure and rising costs.
Fleet bottlenecks and competition
Another critical factor in Lufthansa's planning is the fleet problem. In 2024, the Lufthansa Group was also faced with bottlenecks in its aircraft fleet. Delivery delays and ongoing difficulties in the maintenance and delivery of new aircraft placed a significant burden on the company. The fleet renewal, which aims to increase efficiency and improve the cost situation, could only be pushed forward with some delay.
The question for Lufthansa now is how it will deal with this situation. On the one hand, the airline is forced to optimise its fleet capacity and use existing aircraft to meet demand. On the other hand, modernising 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 planned growth more difficult, which represents a further restriction on the expansion of the core Lufthansa brand.
Perspectives for 2025 and Beyond
Despite the challenges, Lufthansa remains optimistic that the stability it is aiming for can be achieved in 2025. The lower growth rate and the efficiency program are measures that aim to achieve sustainable development while also removing short-term financial pressure from the aviation industry. Experts believe 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 growth could also prove beneficial in the long term, especially in view of the unpredictable market developments. By only slightly expanding the fleet and flight offer, Lufthansa is reducing 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 the global economic situation and demand for travel continue to normalize.