Lufthansa Group has confirmed in a press release that its newly established subsidiary called City Airlines will start flights in the summer of 2024.
The newly founded Lufthansa subsidiary, City Airlines, will start operations in the summer of 2024. This was announced by the Lufthansa Group on October 25. The subsidiary was founded last year and received the AOC license (Air Operator Certificate) from the German aviation authorities in June this year.
The purpose of the new airline is to offer short-haul connections via the Frankfurt and Munich hubs at a lower price than the Lufthansa core brand.
Strategic approach to cut labor costs
City Airlines will operate and collaborate on routes with Lufthansa’s existing subsidiary Lufthansa Cityline, whose cost structure has long been considered too expensive by management.
Both City Airlines and Lufthansa Cityline have the same function – to offer feeder flights to more profitable long-haul flights at Lufthansa’s Frankfurt and Munich hubs. Thus, there is much evidence that in the long term the group will not operate two airlines side by side.
Nothing will change for customers when booking, as tickets will continue to be sold exclusively through Lufthansa.
“With City Airlines, we want to create prospects for the coming decades and secure sustainable jobs in Germany. This is the only way for us to grow and sustainably strengthen the hubs in Munich and Frankfurt,” says Jens Fehlinger, Managing Director of City Airlines.
However, union representatives accuse Lufthansa of using the new subsidiary strategically to reduce labor costs. The group can with City Airlines hire staff on new contracts, which reduces the relatively high cost structure of the airline’s existing short-haul airlines.
Lufthansa was hit by pilot and ground staff strikes in 2022 that paralyzed operations. The group agreed in August to give its pilots pay rises of a total of 18 percent over the coming years to bring stability after the strike over rising inflation. It is estimated that the strike ended up costing Lufthansa 70 million euros.
Competitive strengthening of the short-distance network
According to Lufthansa, recruitment of cockpit and cabin staff will start in November this year. They will primarily hire employees from the existing Lufthansa Cityline team.
In order to position City Airlines in the long term, they are also considering bringing in English-speaking pilots from abroad into the recruitment process.
The competitive strengthening of the short-haul network is crucial for Lufthansa’s market position as a group and for the planned growth in the long-haul segment of the German market.
The new airline, based in Munich, will initially start with four to five jets, mainly of the Airbus A 319 type, which have 138 seats. The group is also considering the possibility of using Airbus A220 or Embraer aircraft.