German aviation group Lufthansa announced on Thursday that it will shut down its regional subsidiary Lufthansa CityLine, as soaring fuel prices and ongoing labour strikes place increasing pressure on its operations.
The airline said the decision forms part of a broader restructuring plan that has been brought forward in response to mounting financial strain. As an immediate step, all 27 aircraft operated by CityLine will be removed from flight schedules within days in an effort to limit further losses.
CityLine employs around 2,000 staff, and Lufthansa said efforts are underway to transfer employees to other parts of the group to avoid job losses.
The move comes as airlines across Europe face a sharp rise in operating costs, particularly for jet fuel. Lufthansa said kerosene prices have more than doubled since the start of the conflict in the Middle East, adding significant pressure to already tight margins.
At the same time, the company has been dealing with repeated labour unrest. This week alone, cabin crew and pilots staged five consecutive days of strikes, disrupting flight schedules and adding to financial challenges.
Concerns about fuel availability have also been raised by the International Energy Agency. Its executive director Fatih Birol warned that Europe could face a shortage of jet fuel within weeks if supply disruptions continue, raising the possibility of further flight cancellations.
Lufthansa said it will reduce capacity across its broader network after the summer as part of cost-cutting efforts. This includes trimming both short-haul and long-haul operations to improve efficiency and focus on more competitive routes.
Chief financial officer Till Streichert said the company aims to streamline its short- and medium-haul operations to strengthen its position in a challenging market environment.
The airline also plans to scale back its long-haul operations by removing six intercontinental aircraft from service at the end of the summer schedule. Additional cuts are expected in the winter 2026/27 timetable, with five more aircraft set to be withdrawn across several routes, reducing the number of flights under the main Lufthansa brand.
Investors reacted cautiously to the announcement, with Lufthansa shares falling by more than 1.5 percent in afternoon trading in Frankfurt.
The decision to close CityLine marks a significant shift in Lufthansa’s regional strategy, as the group adjusts to rising costs, supply pressures and ongoing operational disruptions.
