Lufthansa's $9 bn aircraft bonanza: German airline orders 80 planes from Boeing and Airbus

Lufthansa on Tuesday inked a deal worth $9 billion, ordering a total of 80 planes from both Boeing and Airbus, with delivery set between 2026 and 2032, marking the German flagship carrier's first purchase of Boeing narrow-body planes in approximately 30 years.

According to Reuters, the agreement comprises 40 Boeing 737 MAX 8 planes and 40 Airbus A220-300s, with options for additional purchases: 60 for the MAX 8, 20 for the A220, and 40 for Airbus A320s.

This deal signifies a major strategic shift for Lufthansa, as it not only marks its reentry into acquiring Boeing narrow-body planes but also represents its first-ever purchase of the 737 MAX model. Lufthansa, historically maintaining an all-Airbus single-aisle fleet since phasing out the 737 in 2016, has predominantly focused on Boeing wide-body aircraft, including the 787 Dreamliners, 777 freighters, and the upcoming 777X mini-jumbo.

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Lufthansa CEO Carsten Spohr expressed the significance of the move, stating, "It is a good strategic decision for the Lufthansa Group to order Boeing 737 aircraft again for the first time since 1995," highlighting that the addition of the MAX 8 aligns with the company's commitment to carbon reduction requirements. The deal underscores Lufthansa's pivotal role as Airbus's largest airline customer, with a long-standing relationship that has seen the delivery of its 600th aircraft just months ago.

Boeing shares rose by 1.6 per cent in response to the news, while Airbus saw a 0.6 per cent increase. Lufthansa plans to finance this substantial purchase with net investments of 2.5-3 billion euros ($2.7-3.2 billion) in 2023 and a similar amount in the following year, emphasising that the order's impact on capital expenditure in 2023-2024 would not be significant.

(With inputs from Reuters)

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