Lufthansa is working towards revitalizing its main airline by 2026, as it faces greater challenges than its regional competitors due to rising costs and extended delays in the delivery of Boeing aircraft, according to its CEO.

Carsten Spohr referred to the Lufthansa airline as the "problem child" of the German conglomerate, emphasizing that its recovery is essential for the overall success of the company.

"It is a clear objective for the Lufthansa airline to once again serve as our flagship by its centenary in 2026," he stated during a press briefing on Monday.

This statement comes as investors express concerns regarding the group's third-quarter results, which are set to be released on October 29, with the company's shares having declined by 10% over the past six months.

Lufthansa, which also includes Austrian Airlines, Swiss, and Eurowings in its portfolio, has already issued two profit warnings this year, as escalating wage expenses, pressure on ticket prices, and a challenging aviation environment hinder its recovery efforts.

The delays in receiving essential new aircraft are exacerbating existing challenges, with Spohr noting that Lufthansa has been affected "disproportionately" by these issues.

"We were caught at precisely the wrong moment regarding fleet modernization," Spohr remarked.

The airline is still awaiting the arrival of 41 new Boeing aircraft, with the 777x models already experiencing significant delays.

As a result, the airline has been compelled to continue operating older Airbus planes that it had intended to retire before the pandemic, which hampers its ability to expand services on lucrative routes and improve efficiency, as newer aircraft consume less fuel.

"We are currently operating 23 aircraft that we had planned to phase out," he added.

Other European carriers, including Ryanair, have also faced challenges due to Boeing's prolonged delivery delays.

FINANCIAL STABILITY

According to Spohr, one strategy to enhance Lufthansa's performance is to focus on further international expansion, particularly through its investment in the Italian airline ITA Airways.

Lufthansa has faced challenges from competitors on its transatlantic and Asian routes, leading to the recent cancellation of its Frankfurt to Beijing flights as Chinese airlines have increased their capacity.

Domestic airlines in Germany have been capturing a larger share of the international market, as foreign carriers are discouraged by weak demand for travel to China, rising operational costs, and longer flight durations due to the need to circumvent Russian airspace amid the ongoing conflict in Ukraine.

Lufthansa has expressed its intention to explore opportunities in emerging markets, such as Latin America and Africa, where it may have a competitive edge. Additionally, establishing new hubs with lower operational costs, particularly in Italy, presents promising avenues for enhancing revenue and improving profit margins.