Airlines

Lufthansa Introduces Environmental Cost Surcharge on Its Flights

The Lufthansa Group has announced the introduction of an Environmental Cost Surcharge aimed at covering the increasing costs associated with regulatory environmental requirements.

This surcharge will come into effect for all flights sold and operated by the Lufthansa Group departing from EU countries, the UK, Norway, and Switzerland. The additional cost, which ranges from 1 euro to 72 euros depending on the flight route and fare, will be applied to tickets issued from June 26, 2024, for departures starting January 1, 2025.

Addressing Rising Environmental Costs

The surcharge is designed to offset the rising costs due to regulations such as the EU’s statutory blending quota of Sustainable Aviation Fuel (SAF), adjustments to the EU Emissions Trading System (EU ETS), and other environmental regulations like the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). These measures are part of a broader effort to meet stringent environmental standards and contribute to global climate protection.

Transparent Surcharge Implementation

Passengers will see the exact amount of the Environmental Cost Surcharge in the price details on Lufthansa Group Airlines’ booking pages. This transparency ensures travelers are fully informed about the additional costs contributing to sustainable aviation efforts.

Investment in Sustainable Technologies

The Lufthansa Group is committed to sustainability and invests billions annually in new technologies and innovations to make flying more eco-friendly. The company collaborates with partners to scale key technologies beyond its operations, supporting global climate and weather research.

Despite these efforts, the airline group acknowledges that it cannot bear the increasing regulatory costs alone. Therefore, part of these costs for 2025 will be covered by the new surcharge.

Ambitious Climate Protection Goals

The Lufthansa Group has set ambitious climate protection targets, aiming for a neutral CO₂ balance by 2050. By 2030, the group plans to halve its net CO₂ emissions compared to 2019 through a combination of reduction and compensation measures. Key strategies include accelerated fleet modernization, continuous optimization of flight operations, increased use of SAF, and sustainable travel and freight options for private and corporate customers.

Commitment to a Sustainable Future

The introduction of the Environmental Cost Surcharge reflects the Lufthansa Group’s commitment to a sustainable future. By addressing regulatory costs transparently and investing in green technologies, the airline group is taking significant steps towards achieving its environmental goals and supporting global efforts to combat climate change.

Airlines

Southwest Airlines Unveils 3-Year ‘Southwest. Even Better.’ Plan for Growth

Southwest Airlines today hosted its Investor Day briefing in Dallas, where company leaders unveiled an ambitious three-year plan designed to elevate the airline’s unique business model and deliver an even better Southwest experience.

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This comprehensive plan aims to transform the customer experience by offering more choices and enhanced comfort, all while driving revenue growth and returning to industry-leading profitability.

Transforming the Product to Meet Customer Preferences

The heart of Southwest’s transformation is a customer-centric approach guided by data-driven research. The airline is evolving to meet changing traveler needs while preserving the aspects that make it stand out among competitors.

Assigned Seating: Southwest is moving to an assigned seating model, appealing to a broader customer base. Research shows that 80% of Southwest customers and 86% of travelers with other airlines prefer assigned seating, especially on longer flights. The assigned seating model will be introduced for sale in the second half of 2025, with flights featuring this new option beginning in the first half of 2026.

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Premium Seating: Responding to traveler demand, Southwest will offer premium seating options with up to five additional inches of legroom on roughly a third of its seats, all while maintaining a competitive economy seat pitch. This move is expected to attract more customers and generate additional revenue.
Southwest Boarding with Upgrades: Even with seat assignments, Southwest’s signature boarding process will remain. Customers will still board using position numbers and signage, with the most loyal and premium passengers boarding first, ensuring a smooth and efficient process.
Bags Continue to Fly Free: Southwest’s iconic “bags fly free” policy will remain unchanged, reinforcing one of the key features that sets the airline apart from its competitors. Research confirms that any changes to this policy would reduce demand, making it a core element of the Southwest experience.

Operational Efficiencies to Fuel Growth

To support its growth over the next three years, Southwest is implementing key operational improvements:

24-Hour Operations: Starting in February 2025, Southwest will introduce redeye flights in key markets, enhancing aircraft utilization.
Turn Times Between Flights: The airline is working to reduce the time it takes to turn an aircraft, boosting productivity and making life easier for employees.

Southwest’s Financial Plan

Cost Discipline: Southwest aims to achieve an estimated $500 million in annual cost savings by 2027 through efficient hiring, optimized scheduling, supply chain opportunities, and corporate efficiency.
Strategic Fleet Management: Southwest is modernizing its fleet to achieve an average fleet age of just five years by 2031, reducing average capital expenditures on aircraft to approximately $500 million through 2027.
Prudent Capital Deployment: The airline is balancing its capital expenditures, investing in operational infrastructure, managing debt, and rewarding shareholders with dividends and share repurchases. The Board of Directors has approved a $2.5 billion share repurchase program, demonstrating confidence in Southwest’s strategic plan and revenue-generating initiatives.

Financial Targets

Southwest’s three-year financial plan aims to achieve approximately $4 billion in cumulative incremental EBIT contribution by 2027, with a targeted Return on Invested Capital (ROIC) of 15% or greater, significantly exceeding the Weighted Average Cost of Capital (WACC).