Lufthansa Group announces medium-term targets, makes preparations for capital increase

Lufthansa Group Well Positioned to Seize Future Opportunities

In addition to reducing costs, the Lufthansa Group is strongly committed to accelerating its transformation in order to seize opportunities for profitable growth as a structural winner in the industry:

Capturing Market Opportunities

The Lufthansa Group’s multi-hub strategy and its leading position in key long-haul markets, supported by its global joint venture network, place the Group’s airlines in a prime position to capitalize on the expected rebound in passenger demand. The Lufthansa Group is further adapting to different speeds of recovery in the travel sector by adjusting its offering to an expected slower recovery in the corporate segment, compared to strong pent-up leisure and VFR demand. In this context, the transformed Eurowings will significantly contribute to driving a profitable recovery in the leisure and VFR segment. Based on its robust yield premium and the progress made in reducing unit costs, Eurowings will be able to take advantage of its position as largest leisure carrier in Germany and to achieve profitability levels in line with the overall Group. In addition, Eurowings Discover will tap the large potential of the leisure segment in Germany by serving leisure-focused long haul destinations out of Frankfurt starting this summer. It thereby complements the existing Edelweiss offer in the Swiss market.

Enhancing Customer Centricity and Accelerating Digitalization

The Group has invested significantly in direct distribution in order to enhance the overall customer experience, improve revenue quality and profitability. The share of bookings made in direct distribution channels is targeted to increase further from >50% in 2019 to >75% by 2024. Miles & More, Europe’s largest frequent flyer program, will continue to play a pivotal role in driving customer loyalty and various initiatives have been launched to ensure a seamless and personalized customer experience across the airlines, enhanced by significant digitally-driven innovation. The contactless travel experience that the Group airlines are able to provide means that customers can fly safely and with confidence.

Underlining Commitment to Sustainability

The Group is seeking to halve its net CO2 emissions by 2030 compared to 2019 levels, following the “Avoid – Reduce – Compensate” principle. Measures such as the ongoing modernization of the Group’s fleet, which has been accelerated by the crisis, the increased use of sustainable aviation fuels, improved operational and air traffic management efficiency, as well as financial incentives such as compensation and offsetting.

Optimizing our Ways of Working

As part of the internal transformation plan, the Group will move from an integrated model towards a functional holding concept. This will enable faster decision-making, reduce complexity and foster more efficient cooperation across the Group airlines. The organizational separation of Group and Lufthansa German Airlines functions has been a key element of the change. Going forward, the matrix organization will be limited primarily to core airline functions to ensure maximum operational synergies. The Group’s Management Board will focus on the Group’s strategy, strategic capital allocation and value creation. With regard to its portfolio, the Group is in the process of evaluating options for the partial divestiture of Lufthansa Technik. In the case of AirPlus and LSG Group, full divestitures are targeted once the market environment allows the fair value to be realized.

About the author

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Harry Johnson

Harry Johnson has been the assignment editor for eTurboNews for mroe than 20 years. He lives in Honolulu, Hawaii, and is originally from Europe. He enjoys writing and covering the news.

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