(MENAFN) Germany’s flagship carrier Lufthansa has announced plans to remove more than 100 domestic routes from its upcoming summer flight schedule, citing a sharp rise in government taxes and airport fees that have significantly inflated operating costs. The move underscores growing tensions between airlines and Berlin over policies that executives say are undermining the country’s aviation competitiveness.

Chief Executive Carsten Spohr said the cuts were a direct consequence of Germany’s increasing aviation-related levies. Over the past six years, he explained, government-imposed costs for airlines have roughly doubled, placing significant financial pressure on Lufthansa’s operations.

“Without a reduction in location costs, further cuts will be unavoidable,” Spohr warned. “This involves around 100 domestic flights per week, which could be eliminated again next summer.”

The airline’s financial challenges are not only reshaping its route network but also influencing the type of passengers it serves. The rise in taxes and fees, particularly those attached to economy-class tickets, has accelerated a trend toward premium travel. Lufthansa has seen growing demand in its first, business, and premium economy classes, as it increasingly relies on higher-paying passengers to offset rising costs.

Aviation executives in Germany have long voiced frustration about the country’s high tax burden, which they claim discourages airlines from basing operations there. The German Aviation Industry Association (BDL) echoed Lufthansa’s concerns, warning that the nation’s position as a global air transport hub is “in crisis.”

BDL Chairman Jens Bischof stated in August that since 2019, state-imposed costs have driven airlines to relocate aircraft to neighboring countries with lower charges. According to BDL, the number of aircraft stationed in Germany by European point-to-point carriers has plummeted from 190 to 130 in just a few years.

Lufthansa’s announcement comes on the heels of other cost-cutting measures aimed at stabilizing the company’s finances. Last month, the airline revealed plans to eliminate 4,000 administrative positions by 2030, with most of the layoffs expected in Germany. The decision reflects broader efforts to streamline operations amid persistent challenges, including labor strikes, delayed aircraft deliveries, and underperformance in its mainline business.

As a result of these setbacks, Lufthansa has been forced to lower its financial forecasts twice within the past year. The company also failed to meet the profit margin targets it had set for itself in 2021, reflecting the depth of its ongoing struggles.

Industry data paints an equally concerning picture for the broader sector. The BDL estimates that the total financial burden on German airlines will climb by $1.2 billion in 2025, reaching $4.7 billion in total annual costs. The group warns that the additional expenses could lead to the loss of 10,000 jobs and strip $4.3 billion in yearly economic value from Germany’s aviation ecosystem.

Analysts say Lufthansa’s cuts signal deeper structural issues in the German aviation market, where higher environmental taxes, airport fees, and regulatory costs have eroded competitiveness compared to nearby European hubs like Amsterdam, Zurich, and Vienna.

Without relief from the government, they warn, more flight reductions — and potentially a loss of market share — could be on the horizon.

MENAFN20102025000045017640ID1110220307