The arithmetic keeps getting harder for Lufthansa shareholders. Germany’s flagship carrier has now failed a third time this year to reclaim its place in the DAX, with Deutsche Börse confirming on Thursday that the index lineup remains unchanged. The rejection follows earlier disappointments in March and June, extending the airline’s exile from the blue-chip benchmark to six years since its demotion in June 2020.
The practical consequences extend beyond prestige. A DAX berth would trigger automatic buying from index-tracking funds and lift the stock’s profile among institutional investors. Instead, Lufthansa remains anchored in the MDAX, a status that does little to counter the share’s recent drift. The equity closed Friday at EUR 7.86, up 1.7 percent on the day, yet still down 9.3 percent over the past month and 23 percent below its July peak of EUR 10.27.
A Costly Labour Dispute Moves Toward Mediation
While the index question carries symbolic weight, the unresolved pay dispute with pilots’ union Vereinigung Cockpit (VC) cuts deeper into the financials. The two sides have agreed to enter arbitration covering the core brand, Lufthansa Cargo, CityLine, and Eurowings. Former state premiers Bodo Ramelow and Roland Koch will serve as mediators, with a proposal due by November 15 and the full process slated to conclude by December 31.
At the heart of the conflict are demands from roughly 5,000 pilots for higher employer contributions to occupational pension plans — a concession Lufthansa has so far resisted. The cabin crew union UFO is simultaneously pushing for a new collective agreement, adding another layer of complexity.
The labour friction already left its mark on second-quarter results. Alongside roughly EUR 750 million in higher fuel costs, strike-related expenses of at least EUR 150 million weighed on operating profit, which came in at EUR 383 million. Since that earnings report roughly a month ago, the stock has shed about 15.1 percent.
Cost Discipline Meets Network Surgery
Management is responding with a familiar playbook: trimming marginal routes while investing in the long term. From October 25, four European connections will be dropped — Frankfurt–Nantes, Frankfurt–Triest, Munich–Genoa, and Munich–Istanbul — with Lufthansa operating two of these and subsidiary Air Dolomiti the others. Frequency on Frankfurt–Chicago also drops from 14 to 10 weekly flights. These cuts to thin-margin short-haul services align with the cost-saving drive initiated after the summer profit warning.
The fleet programme, however, continues unabated. The supervisory board approved in May the purchase of ten Airbus A350-900 and ten Boeing 787-9 aircraft at a list price of USD 7.7 billion, with deliveries scheduled between 2032 and 2034. The order book now stands at 232 aircraft, including 107 long-haul jets. Deliveries of the first Airbus A220-300 for the new Lufthansa City Airlines unit begin this autumn, with that fleet expected to be complete by 2031.
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Product Upgrades and Leadership Shifts
Service enhancements are rolling out in parallel. From September 1, economy passengers on short- and medium-haul routes receive five hot meals, while the winter schedule starting September 15 introduces new business-class seat categories on long-haul flights. Starlink Wi-Fi, first deployed operationally in August on the Frankfurt–Rome route, is slated to reach around 850 aircraft by 2029.
Several management changes accompany the operational adjustments. Edi Wolfensberger becomes CEO of Edelweiss on October 1, succeeding Bernd Bauer, while Matthias Spohr takes over as COO at Eurowings the same day. Michael Kircher assumes leadership of Lufthansa City Airlines from November 1.
A Bid for Southern European Reach
The carrier is also pressing ahead with a binding offer for a minority stake in TAP Air Portugal, competing with Air France-KLM for influence over the Portuguese national carrier. Success would provide access to a transatlantic joint venture with United Airlines and Air Canada — a strategic prize that explains the persistence despite the current headwinds.
Technical Picture Remains Fragile
For now, the chart offers little encouragement. With a relative strength index of 42 and the price trading well below its 50-day moving average of EUR 8.68, momentum is lacking. Annualised volatility of 35 percent signals that investors should brace for continued swings while the labour situation and operational pressures remain unresolved.
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The next index review offers another opportunity for a fourth attempt at DAX re-entry. Whether the share price can build the momentum to support such a bid — and whether arbitration delivers a settlement before year-end — are the questions now dominating the outlook.
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