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Jet Fuel

How 70 Gas-Guzzling Jets Are Killing Lufthansa


A Lufthansa Airbus A340 at the airport Duesseldorf, Germany in 2008

Photograph by Patrik Stollarz/Getty Images

A Lufthansa Airbus A340 at the airport Duesseldorf, Germany in 2008

(Corrects the number of Airbus A350-900s in the first paragraph.)

Lufthansa announced a 59-jet order today intended to replace its long-haul fleet, splitting the hefty purchase between Boeing (BA) and Airbus. The German airline will buy 34 of Boeing’s new 777-9X and 25 Airbus A350-900, with the first scheduled to arrive in 2016. Neither jet is yet in production, and Boeing’s board hasn’t even approved the 777-9X program. The deal is valued at $19 billion at list prices, without counting discounts typically given for large orders.

Behind the headlines, however, lies an ugly reality: Lufthansa (LHA:GR) is stuck with a fleet of 48 Airbus A340s and 22 Boeing 747-400s, both of which have four engines and higher operating costs than newer, two-engine models. Neither of the older airplanes is still being built, although Boeing does turn out a newer 747-8 Intercontinental—and Lufthansa has bought nine of those, too. Airbus and Boeing have been buying back 747s and A340s from some customers as deal enticements to help sell newer planes.

The last of the older gas guzzlers isn’t expected to be phased out of Lufthansa’s fleet for another 12 years, but the fuel savings from newer models can’t come soon enough. The airline said the new jumbo jets will reduce its fuel costs by a whopping 25 percent, on average.

Bachman is an associate editor for Businessweek.com.

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