An airline has ceased its regional operations due to a sharp rise in kerosene prices triggered by the recent conflict in the Middle East.

Since the onset of the Middle East crisis in late February, global oil prices have surged, leading Lufthansa to announce the closure of its subsidiary airline, CityLine. The German carrier stated that it was expediting its corporate strategy, resulting in the permanent removal of 27 operational aircraft from Lufthansa CityLine’s flight program.

The decision became effective on April 18, with the company emphasizing that the move aimed to minimize further losses incurred by the struggling airline. Lufthansa highlighted that the Canadair CRJ aircraft were reaching the end of their technical operational capacity and posed high operating costs.

Simultaneously, Lufthansa is downsizing its long-haul capacity, with a projected total of six intercontinental aircraft by the end of the summer flight schedule, as reported by the Express.

Lufthansa disclosed that the remaining four Airbus A340-600s will be phased out of the fleet in October, marking the definite end of this aircraft type’s era at the airline, with plans for a final farewell next year.

The Lufthansa Group’s passenger airlines have reportedly hedged around 80% of their kerosene consumption at above-average rates considering crude oil prices.

Acknowledging the challenges posed by heightened kerosene costs and geopolitical uncertainties, Till Streichert, Lufthansa Group’s CFO, emphasized the necessity of accelerated fleet and capacity actions to enhance competitiveness and focus on short- and medium-haul platforms.

Streichert remarked that the decision to remove CityLine from the program was part of their long-term strategic plan, accelerated by the current crisis. Despite the difficult step, Lufthansa aims to provide continued employment opportunities within the Group for affected employees.

Additionally, Lufthansa stated that ground staff had already secured positions at the newly established Lufthansa Aviation GmbH, while cockpit and cabin crew were offered transfer options with comparable compensation conditions to Lufthansa CityLine. Any differences in working conditions were to be offset by compensation payments as part of this transition. CityLine, founded in 1963, five years after Lufthansa, will cease operations.

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