Lufthansa lays out €2.1bn on new aircraft

Germany’s Lufthansa Group is to spend €2.1 billion (US$2.5bn) on new aircraft after confirming it has ordered up to 16 new planes, comprising up to 12 Airbus A320s and four Boeing 777s.

The company says it is continuing to invest in fleet modernisation, with its supervisory board approving the deal yesterday. Delivery is scheduled to take place in stages until 2022.

The order of up to 12 short- and medium-haul A320-type aircraft included six existing delivery options for A320neos due in 2022 that were converted to fixed orders. They will replace older aircraft in the operating fleet. Lufthansa also added that “depending on availability, up to six additional A320ceos will be ordered. The plan is to deploy them at Lufthansa this year, to offset delivery delays for Airbus A320neo aircraft”.

The order further includes two B777-300ER long-haul aircraft for Swiss Airlines, which are expected to supplement the existing fleet beginning in early 2020 and will be used to expand the route network. An additional two B777F will be ordered for Lufthansa Cargo, replacing MD11 cargo planes.

The investment in fleet expansion at Swiss and a more modern cargo fleet “reflect the economic success of the two companies. In the first quarter, traditionally a weak quarter for airlines, Swiss had a profit margin of over 9%; Lufthansa Cargo’s was over 10%. The order for the new long-haul aircraft highlights the strategy of Lufthansa Group to predominantly allocate the growth within its multi-hub system where cost and quality offer the best conditions for profitable investments,” it added.

Lufthansa needs the new aircraft as it continues to expand its capacity rapidly this year, mainly through its Eurowings low-fare brand, as it further fills the gap left by Air Berlin, which went bankrupt last year.

 

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