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May 26, 2024
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Lufthansa is quietly progressing with its plan to launch a new short and medium-haul airline in Europe. The new carrier will be called Lufthansa City Airlines and has already started recruiting staff for ground operations. A launch date depends on various factors, not the least reaching an agreement with the pilot union Cockpit. Lufthansa quietly prepares launch of City Airlines.

The German airline group has been studying the concept of a new regional subsidiary for over a year. During last year’s annual results press conference, CEO Carsten Spohr said that a sister airline to regional carrier Lufthansa CityLine was considered, with a launch of operations in early 2023.

There are a number of reasons why Lufthansa wants a new domestic and European subsidiary. As a spokesperson of the airline points out to AirInsight, Lufthansa wants to recapture market share. Lufthansa Airline has lost a significant share in the European market in recent years. In a highly competitive and fast-paced environment in the short- and medium-haul sector, stable and sustainable solutions are needed to make hub-contact traffic viable for the future,” he says in an email.

“With the goal of developing structures for a strong, competitive short- and medium-haul airline to feed the Lufthansa hubs, the “CityLine 2” project was launched at Lufthansa CityLine in April 2022. As part of the project, the company “City Airlines GmbH” was founded in April 2022, which is necessary for the implementation of a new AOC.” Indeed, City Airlines has been registered on April 6, 2022 in Munich.

Germanwings pilots

Another reason for a new carrier was outlined by Spohr last year. “It will offer an opportunity to employ some 250 captains that were active with Germanwings, which has now been dissolved and which would risk unemployment.” Germanwings ceased passenger operations in April 2020. Employing them with a new subsidiary would benefit both parties.

But Lufthansa had in mind to employ the former Germanwings pilots under contracts with cheaper wage schemes compared to those at other airlines within the group, including Eurowings. The airline and pilot union Cockpit discussed the plan, which was met with incomprehension and opposition. This was at the same time when the Group and union had intense discussions about an overall review of the pilot wage scheme and the size of mainline operations, which resulted in a number of strikes last year that severely impacted Lufthansa’s operations.

In September, the airline and union agreed on a pay increase and agreed to continue discussions on a range of topics. Importantly, the union agreed to a ‘peace obligation’ not to strike until June 30, 2023, while Lufthansa would make no strategic decisions. Following this ‘truce’, the plan for City Airlines was put aside.

Website already alive

With June 30 only some 3,5 months away from now, the plan is gathering pace again. aeroTELEGRAPH found out that a City Airlines website is already online. It says that the airline has been established in the summer of 2022 in Munich and will offer passengers Lufthansa quality on short and medium-haul routes within Europe, operating an Airbus fleet. In administrative and technical areas, City Airlines is working with CityLine and other partners within the Lufthansa Group.

When asked about the status of the project during last month’s FY22 press conference, Carsten Spohr admitted that the situation is not an easy one. “We are in negotiations with Cockpit. Either we will need another perspective agreement PPV, a PPV 2.0 perhaps, which will also state how many aircraft we will be able to operate. I am optimistic because both sides know what is at stake.”

In the email to AirInsight, the spokesperson says that recruitment has already started for non-flying positions: “The postholder functions required by aviation legislation and laws are filled in personal union for both City Airlines and Lufthansa CityLine at the same time and will therefore not be advertised. The positions of the ground operation have been advertised internally since 22 February. On-board personnel will also be hired at a later date for operational flight operations. In this context, the agreement applies in the cockpit not to hire any personnel until 30 June 2023, who are not necessary for the implementation of the AOC.”

Key to City Airlines’ plan will be a successful outcome of negotiations between Lufthansa and Cockpit. Without that, the airline will not be able to start recruiting pilots and prepare for launch. It also will need a fleet of aircraft, which will likely be Airbus A319s at first. Asked about the regional fleet plans, Spohr said last month that “we assume that there will be a three-digit number of aircraft. The campaign will start this year and run out in 2024. The regional fleet doesn’t mean regional aircraft: you are talking about A319s as replacements for CRJs.”

author avatar
Richard Schuurman
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016. Richard is contributing to AirInsight since December 2018. He also writes for Airliner World, Aviation News, Piloot & Vliegtuig, and Luchtvaartnieuws Magazine. Twitter: @rschuur_aero.

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