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Buy When Others Are Fearful! Lufthansa Buys B787 & A350 Amid COVID

At the beginning of May, Germany's flag carrier Lufthansa announced the acquisition of ten new aircraft: 5 Boeing 787-9 and five A350-900. The news surprised the industry, given the fact that Lufthansa still largely suffers from the pandemic situation. Here's the background!

It was a message nobody expected at that time when Lufthansa’s CEO, Carsten Spohr, announced the acquisition of ten new aircraft. Nevertheless, it was an interesting message when Lufthansa and most European airlines still have to ground a considerable portion of their fleet.

Jul ’20Aug ’20Oct ’20Nov ’20Dec ’20Feb ’21Mar ’21
Asia Pacific22%22%21%20%20%21%21%
North America35%35%34%32%32%32%32%
Latin America44%38%34%31%28%27%29%
Percentage of Parked Aircraft In Relation To Total Fleet

B787-9 Delivery Already in 2021

And it became even more interesting when Mr. Spohr explained the timeline. Some of the newly acquired Boeing 787-9 aircraft are already planned for 2021’s winter schedule. The other 787-9 will follow in the first half of 2022. The extremely short timeframe shows that Lufthansa is taking advantage of other airlines’ postponement plans. Furthermore, the five Boeing 787-9 are already produced and contain an improved business class. Therefore, although no price details became public, one can assume that Lufthansa made an excellent deal. 

Including the five additional 787-9, Lufthansa’s awaits 45 Boeing 787-9 and 777-9 until 2030. 

Aircraft TypeIn-ServiceOrdered
Boeing 747-4008
Boeing 747-819
Boeing 777-920
Boeing 787-925
Lufthansa’s Boeing Fleet (Source: Wikipedia)

A350 to be delivered in 2027 and 2028

The additionally ordered A350 adds to a total of 45 A350 aircraft Lufthansa will receive until 2030. Moreover, Lufthansa has a total of 110 Airbus on its order book. At the moment, Lufthansa receives one new A320neo every month and will complete the fleet renewal until 2027.

Aircraft TypeIn-ServiceOrdered
Airbus A319-10023
Airbus A320-20060
Airbus A320neo3054
Airbus A321-1002025
Airbus A321-20043
Airbus A321neo9
Airbus A330-3001531
Airbus A340-30017
Airbus A350-90017
Lufthansa’s Airbus Fleet (Source: Wikipedia)


Lufthansa Fleet Strategy: Downsizing & Modernizing

Lufthansa’s management once again underlined the latest acquisition of an additional 787-9 and A350 aircraft is entirely in line with its fleet restructuring plan. Both aircraft types will replace the Airbus A340. The 4-engine A340 currently accounts for 50% of Lufthansa’s long-haul flights. Based on the fleet renewal, Lufthansa plans to reduce the share down to 15% by 2025. Moreover, the modernization will positively impact operational costs with a reduction of 15%. 

A Smart Move by Lufthansa — Buy When Others Are Fearful!

It seems that Lufthansa made a very smart move with the acquisition of additional Boeing 787-9 and Airbus A350. One of the explanations Mr. Spohr outlined with his statements was “anticyclical opportunities.” In the stock market, this strategy is called “buy when others are fearful.” The reason behind this is pretty simple: When demand is low, prices are too. Therefore, it seems to be a perfect time to invest in Lufthansa’s fleet renewal further.

Lufthansa’s Fleet Strategy — What do you Think?

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Benjamin Walther

CEO, Frankfurt

Benjamin is Information Design's CEO and a proven content-maniac. Besides running a successful business and developing pioneering ideas, he's dedicated to writing blog posts and creating content.

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