In October 2023, Lufthansa announced plans to launch yet another subsidiary, with the sole purpose of finding a loophole to pay employees less. More details about this new carrier have just been revealed, including the first routes that it will operate.
In this post:
The basics of new Lufthansa City Airlines subsidiary
Lufthansa City Airlines is Lufthansa’s newest subsidiary, and it will begin operations in the summer of 2024. The airline will initially operate Airbus A319s — two jets have already been repainted in the Lufthansa City livery, and two more are expected to be ready before the airline launches.
In the long run, Lufthansa City Airlines plans to operate Airbus A220-300s. Lufthansa Group has ordered up to 60 of these (40 firm orders plus 20 options), and they’re primarily intended for Lufthansa City Airlines. Deliveries are expected to start in 2026.
As far as routes go, the plan is for Lufthansa City Airlines to operate out of Lufthansa’s biggest hubs, serving feeder routes for Lufthansa, alongside Lufthansa mainline jets, as well as Lufthansa CityLine jets. The first flights will be out of Munich (MUC):
- Domestic destinations will include Berlin (BER), Bremen (BRE), Cologne (CGN), Dusseldorf (DUS), Hamburg (HAM), and Hannover (HAJ)
- International destinations will include Birmingham (BHX), Bordeaux (BOD), and Manchester (MAN)
From a passenger experience standpoint, this will be identical to flying with Lufthansa in terms of the cabin, food, drinks, etc. The only difference is that the plane will have a slightly modified livery, and you’ll be served by crews who specifically work for this subsidiary. For the purposes of earning miles and elite recognition, this will be the same as a mainline Lufthansa flight.
City Airlines already received its Air Operator Certificate (AOC) from the German Federal Aviation Authority back in June 2023. The airline also started recruiting both pilots and flight attendants in late 2023.
Jens Fehlinger, Managing Director of City Airlines, explains how the intent with this subsidiary is to create “sustainable” (in other words, lowering paying jobs) in Germany:
“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.”
Why does Lufthansa need another subsidiary?!
It’s almost comical just how many subsidiaries Lufthansa has. Before City, we had Eurowings, Discover Airlines, CityLine, and I’m sure I’m missing some. And that doesn’t even consider all the subsidiaries in the past, plus all the other Lufthansa Group partner subsidiaries.
So, why does Lufthansa need yet another subsidiary? Well, currently there’s the Lufthansa CityLine subsidiary, which primarily operates Canadair and Embraer regional jets, though also operates some Airbus A319s and A320s (and in the past even operated A340s).
The catch is that Lufthansa has a scope clause with its mainline pilots regarding this subsidiary, and they’re limited to only flying planes up to a certain size. There’s an exemption currently in place that allows them to fly a small number of A319s and A320s, but that exemption will be ending in the next couple of years, which is why Lufthansa is setting up yet another subsidiary.
So while Lufthansa can’t have CityLine operate larger aircraft in the long run, the company can apparently start a brand new subsidiary, and have those planes be bigger, as that airline isn’t governed by Lufthansa’s current bargaining agreement with pilots. So expect crews at Lufthansa City Airlines to get comparable pay to Lufthansa CityLine, only on bigger jets…
It’s just kind of amazing how bad faith the negotiations are with these contracts and subsidiaries, eh?
Bottom line
Lufthansa is launching another subsidiary in the summer of 2024, named City Airlines. The airline will operate Airbus A319s out of Frankfurt and Munich, with feeder services similar to those currently operated by Lufthansa CityLine, as well as Lufthansa mainline jets. Eventually, the airline will operate A220s, and will become quite large.
The intent is to be able to hire employees with a cheaper labor contract, without violating the agreement with Lufthansa’s mainline pilots…
What do you make of Lufthansa City Airlines?
You forgot Austrian, Swiss and Brussels subsidiaries ;)
We're flying them (A319) on May 4, WAW-MUC and then connecting on a United 787 to ORD. I did not pay attention until reading this article.
When unions request a 12% raise (way above inflation) plus 3000€ one-time payment (to cover inflation as well) this simply is not sustainable from a business perspective. Lufthansa needs to work around that.
Don’t forget Germanwings
I already have a bad feeling about this. I have recently flewn British Airways CityFlyer from ZRH-LCY in Business Class (redeemed avios). Never, ever again. Not worth even avios. By far the worst business class trip ever. Service, food, crammed cabin...
Will avoid this new LH marvel, unless there are plenty of good reviews...
To give some credit to Lufthansa: they have by far the highest cabin and cockpit crew cost base of any European carrier. Especially their cabin crew earn 50% more than at AF and almost double the cabin crew wage at BA.
With that cost base, there is no way they can maintain their business model of having so many flights within Europe, given increasing competition from LCCs. Ryanair wants to more than double their capacity...
To give some credit to Lufthansa: they have by far the highest cabin and cockpit crew cost base of any European carrier. Especially their cabin crew earn 50% more than at AF and almost double the cabin crew wage at BA.
With that cost base, there is no way they can maintain their business model of having so many flights within Europe, given increasing competition from LCCs. Ryanair wants to more than double their capacity in Germany...
So if you look at LH's profitability, crew costs are amongst the highest in the industry - and yet the unions keep asking for higher wages, less working hours, more hierarchies, more rigidity, etc. Therefore, it makes sense that Lufthansa is working actively to manage that cost.
Perhaps LH should adopt BA's strategy and abandon intra-European flights except from one city?
That‘s exactly what LH has been doing for several years now - all LH mainline, LH CityLine and all future LH City flights will exclusively fly to/from its hubs in FRA and MUC.
The traffic to/from all other German airports is Eurowings‘ task.
Germany is simply too decentralized to focus everything just on one city.
BA has intra Europe flights from London
Is it just me noticing the livery does not display any Star Alliance Logo?
It is to be seen on the renderings but not on the "real" aircraft.
Honi soit qui mal y pense....
When I read how toxic relationships are between LH management and employees it makes me not want to give them any money and book away. Contempt for customers and employees usually go hand in hand.
LH Group is an absolutely absurd conglomeration of airlines and subsidiaries and God knows what else. How they can possibly keep it all straight is beyond me. From a marketing standpoint, none of this makes any sense. Yes, you could say that this may be like KLM Cityhopper. Except that KLM doesn't also have KLM CityHopperLine (as a separate airline) and KLM Discover and KLM Discover Europe and DutchWings and EuroDutchWings, and so on. Get my point? It's idiocy.
Transavia?
Air France and HOP!
KLM and city hopper
Transavia France ( TO) and Transavia Netherlands (HV). The two transavias are entirely separate.
OK, that's 2 each. How many does LH juggle? Nobody knows....
Worse yet, there's no logic to any of them.
AF also had Joon, but merged that back into AF (and so the staff got significant payrises?)
And wikipedia suggests they may be doing something similar with Hop.
This, not special meals, is what LH FAs and pilots should care about - but like AA FAs, they take it out on passengers when they aren't smart enough to negotiate iron-clad protections for their members.
And the issue is not shady negotiations but the inability of unions to target the things that matter - either in Europe or the US. Companies like LH can drive a truck straight through those loopholes and, given how...
This, not special meals, is what LH FAs and pilots should care about - but like AA FAs, they take it out on passengers when they aren't smart enough to negotiate iron-clad protections for their members.
And the issue is not shady negotiations but the inability of unions to target the things that matter - either in Europe or the US. Companies like LH can drive a truck straight through those loopholes and, given how often they have done it with "subsidiaries" you have to ask why LH is so successful and their unions are so powerless to stop it.
How can you not mention South Park and City Airlines?
Poor choice of airline name haha.
I think the term for this is union busting.
quite the opposite actually. The LH unions want these subsidiaries, as the employees of these are new and their creation allows LH existing employees (union customers) to be untouched.
Ha, as if. Down the road they will find themselves out of work, as soaring cost levels will make them highly uncompetitive. Yes they brought it on themselves but will hurt them long term.