The Lufthansa Group has unveiled its sweeping Matrix Next Level program, a restructuring initiative aimed at centralising operations across its network while streamlining decision-making. Set to be rolled out gradually from early 2026, the program marks a significant shift away from the Group’s traditional decentralised model, where carriers such as Swiss, Austrian and Brussels Airlines maintained a degree of independence in managing their route planning. Instead, all route planning decisions will now be made in Frankfurt. A newly established Hub Steering Board will oversee Europe’s major Lufthansa Group hubs, including Frankfurt, Munich, Zurich, Vienna, Brussels and Rome, ensuring schedules are aligned to maximise connectivity, as well as avoid duplication and reduce costs.
The Hub Steering Board plans to optimise schedules around connections to long-haul services at the Group’s six hubs from European feeder markets and also take into account relevant nonstop markets. While the schedule coordination will be a central function, the hub steering board is supposed to give the CEOs of individual airlines the opportunity to reject changes that would have a material negative impact on their operations.
The development could have significant implications on the Group’s network in the former Yugoslavia. The Lufthansa Group dominates in a number of markets in the region, while Lufthansa itself has in recent months begun offloading some routes from its mainline operations to subsidiaries. This includes Discover Airlines taking over some services in Croatia, while Air Dolomiti will take over some of Lufthansa’s flights in Europe from this October, including the likes of Ljubljana, Prague, Amsterdam, Birmingham and Luxembourg. Furthermore, it leaves in doubt the previously announced expansion of select Lufthansa Group members in the region for next year, such as Swiss’ planned Geneva - Sarajevo service, Eurowings’ expansion in Bosnia and Herzegovina’s capital, as well as ITA Airways’ interest in former Yugoslav markets.
The centralisation push is not without controversy. Concerns have emerged within subsidiaries about the loss of strategic autonomy, with questions raised over how local markets will be represented in network and pricing decisions. Lufthansa maintains that Matrix Next Level will deliver both efficiency and reliability, positioning the Group to compete more effectively in Europe’s crowded marketplace. The Group pointed out that the individual airlines will remain responsible for operations and customer experience decisions such as inflight products, catering and lounges in their home markets. The centralisation push comes after Lufthansa Airlines posted an operating loss of 300 million euros during the first half of the year.
smaller regional routes will be cut if they don’t fit Frankfurt’s priorities.
ReplyDeleteCentralising route planning in Frankfurt may help Lufthansa Group save money but passengers will feel the consequences. Smaller hubs like Vienna and Brussels will lose connections if everything is designed only around feeding Frankfurt and Munich.
DeleteIt is balancing act in between overlapping and loosing connections from hub. This could be seen as a boosting bigger hubs, but definitely smaller hubs like VIE will suffer in long run. Let's see if regional airports will lose connections to smaller hubs and get boost from the bigger ones.
DeleteEverything won't be designed only around feeding Frankfurt and Munich.
DeleteIt says that the schedules will be optimized around connections to long-haul services at the LH Group’s six major hubs from European feeder markets.
It makes sense.
As a frequent flyer with Austrian, I can’t say I’m thrilled. I think Austrian may cut Zagreb as a result. They have been decreasing flights steadily for last couple of years.
ReplyDeleteIt could be great news for OU in general. I think LH Group will get them to operate more of the LH Group flights from Croatia. Lufthansa has said their short haul European flights are mostly loss making but they need them to feed their lucrative long haul flights. So for LH it would be perfect for OU to take over loss making routes.
DeleteGreat for OU to loose more money...
DeleteWell there is a reason no other Lufthansa airline flew to Ljubljana before Adria went bankrupt. It used to feed them while loosing money on these routes.
DeleteAgree ZAG- Vie makes no real sense and capacity has been slowily moving towards MuC in recent years
DeleteI hope they stay but I think they are decreasing flights this winter too.
Deletethey have the least capacity in ZAG out of all ex-Yu capitals
Deletehttps://www.exyuaviation.com/2025/08/austrian-airlines-boosts-ex-yu.htm
From a business perspective, it makes sense. Too many overlaps, too much inefficiency.
ReplyDelete+1
DeleteExactly. That's why they bought all these companies, to create leverage through economies of scale which require some level of centralized decissions. If this is the right way to do it, the time will tell but it would be crazy not to try.
DeleteNot good for Swiss though, IMHO.
Delete^ agree
DeleteExactly. A perfectly logical decision.
DeleteSo basically Lufthansa is admitting it can’t make money without squeezing its subsidiaries.
ReplyDeleteHuh? Lufthansa group made 1.6 billion in profit full year 2024. First half of the year is generally loss making for them.
DeleteWe are talking about Lufthansa the airline, not Lufthansa the group. This is all being done to prop up Lufthansa the airline. And no, first half is not generally loss making for them.
DeleteI can see Discover replacing LH on all flights to our region.
Delete^ I highly doubt it will replace all LH flights. Capital cities will stay on LH metal. Maybe in LJU, Air Dolomiti takes over.
DeleteI think Austrian could loose the most routes in the region.
DeleteAustrian is already much smaller in the region than before they became part of the Lufthansa Group.
DeleteThese are not its subsidiaries, but LH owns all of these airlines. It is in the owners' interest that they all operate positively, as ultimately the profit of the entire group is important.
DeleteTrust me. Profit of Lufthansa the airline is most important. Much more than any other airline in their group.
DeleteI can't. It's pure speculation.
DeleteThankfully you will eat up whatever Spohr tells you
DeleteIf a business is amazingly profitable you usually don't launch a restructuring as Lufthansa is doing.
DeleteExactly
DeletePredator
ReplyDeleteAnd destroyer! It is now going to destroy Swiss like it did Austrian, even Brussels Airlines is now talking about how bad joining LH was for them. Google it.
DeleteUnfortunately :(
DeleteDoes this increase or decrease chance of ITA coming to the region?
ReplyDeleteAnswer should be "decrease" since LH will now want to dictate subsidiaries what to do. But I think they still only own like 40% of ITA shares so it's not clear how much autonomy of the latter is left
DeleteOh God I forgot they bought into ITA. Italians still didn’t learn not to go into business with the Germans. Sorry to see a good airline go to waste.
Delete^ What good airline are you talking about? Alitalia?
DeleteLufthansa said the other day they are going to increase share in ITA to 90%.
Delete^ wow!
DeleteAnd the EU just keeps letting them buy airlines to no end.
ReplyDeleteWhen EY was buying up airlines like crazy everyone said how it would bite them. When LH buys airlines, I haven't heard the same. Even the loss making ITA.
DeleteTAP is next :D
DeleteWill they ever stop. Where is the EU competition commission?
DeleteAlthough you may not tell, the European aviation business is quite fragmented. LH is not even the market leader, there's no competition commission who will react if the concentration is not that high and on European level it is not. It is not even on some LH markets: Italia for example, although they had to give up on some slots, I believe, even though ITA is not market leader there, or hadn't been at the time...
DeleteAs 9:45 wrote, the marekt in Europe is fragmented. There are three major groups: LH, AF/KLM, IAG + a number of smaller legacy airlines (Finnair, TAP, LOT, Aegean) + a number of LCC (Ryan, Wizz, EasyJet) + on long-haul towards Asia/Africa, strong competition from the GCC airlines / TK + on long-haul towards US / Canada, strong competition between three major US airlines and their European allies.
DeleteLH seems dominant because they cover our region better than the others (when it comes to connecting to the Western Europe), but AF/KLM is trying to compete.
LH is dominant because it owns airlines in Europe's biggest markets.
Delete@10.01. Actually, they don't. The biggest markets are UK, Spain and France.
DeleteSure Germany and Italy are completely irrelevant.
DeleteLH Group is a major connector, especially for the markets East of them. Hence, the perception of their dominant position.
DeleteWhere I live, there is no EasyJet presence. In my 20+ years of flying I took EasyJet twice (to and from London). Wizz on teh other hand I took maybe 50 times. It does not change the fact that EasyJet had more than 30 million passngers more than Wizz in 2024.
In my head, Ryan and Wizz are equal competitors, whist Ryan had 3 x more passsengers than Wizz in 2024.
It's all a matter of perception based on the personal experience.
@10:12. I did not say they are irrelevant. But they are not the biggest markets in Europe. On top of that, Italy is peneterated by the LCC and ITA has a hard time to compete in this market.
Delete@10:01 Please inform yourself before commenting. Lufthansa does not own ANY airlines in Europe's three biggest aviation markets.
DeleteWhy is the Lufthansa fan brigade so persistent in showing that they serve irrelevant markets as an explanation to why they are given a free ride by EU regulators compared to other airlines when they decide to acquire another airline.
DeleteGermany owns EU so it makes sense that it is looked the other way when Lufthansa is concerned.
DeleteYes, and look how bad Germany is running things. Their reputation sure went down the drain in recent years, rightfully so in my opinion.
DeleteJust remember back to the demise of Air Berlin instead of stepping in to protect competitiveness of the German market, the EU let LH to just take over from where Air Berlin left off. On top of that their constant creation of subsidiaries with lower base salaries to take over from existing ones and operate with better margins at the cost of the workforce layoffs. The EU should protect the market, keep it competitive and protect workers rights, but it's all so eager to let good ole lufty do it's thing to keep the Germans happy
Delete+100 last anon
Deletewow
ReplyDeleteLJU as Lufthansa Group fortress will be most affected.
ReplyDeleteWhat could happen?
DeleteI think Air Dolomiti will completely take over the LJU flights.
DeleteI'm surprised how many routes Air Dolomiti is taking over, at least partially.
Delete"fortress" with 4 daily CRJ flights. And why LJU will be affected, can you elaborate how you conclude that from the article, I am really curious?
DeleteYes it is a fortress since it is served by Lufthansa, Brussels Airlines, Eurowings and Swiss and has the highest ratio of LH Group flights compared to other ex-Yu capitals.
DeleteIt is the first capital city where a subsidiary is taking over the majority of one of Lufthansa's routes, and I would not be surprised completely in the future. Also, I don't think this gives good chances for ITA and Austrian to start flights.
LJU is the capital of Slovenia nevertheless it's a medium sized city and market so Air Dolomiti is perfect. No need for a LH mainline A321 4 times per day.
DeleteIt’s sad that Trieste is now the bigger airport. So I guess LJU is falling back to its provincial ways so known to us Slovenians, when Trieste was the city and Ljubljana was the village.
DeleteWell, Trieste was the 4th largest city in the Austro-Hungarian empire.
DeleteThis could have big implications for their ex-Yu network.
ReplyDeleteNot in terms of capacity- but in terms of passeneger flows
DeleteYes. All of us going through that dump called FRA - no, thanks. Last time I was there the toilets were unusable! They still haven’t reached pre-2019 levels and I guess they are going to push them at the cost of other airports and airlines in the group. Germany always ruins things for others. Just like it ruined Schengen.
DeleteI frequent ZRH, and no doubt they'll make adjustments they see fit to protect FRA and that's the problem for those who want options and not necessarily the LH product
DeleteSwiss is the best of the LH group. Hope they don't ruin it.
DeleteGood thing each airline will still be responsible for their own onboard service, considering Lufthansa's is far from good.
ReplyDeleteWho could have seen this coming....
ReplyDeleteI don’t like this at all. Swiss has built its reputation on understanding the Swiss market, not on being a feeder for Lufthansa. If every decision is made in Frankfurt Swiss risks becoming irrelevant.
ReplyDeleteTo be fair, duplication within the Group has always been an issue. Sometimes you’d have Lufthansa, Swiss and Austrian all competing on the same route with half-empty planes. It makes sense to coordinate better.
DeleteIn the end, only the result of the entire group counts. At this point, we can only speculate what will happen, but it is true that it often makes no sense to have departures at practically the same time for different hubs, which means that within the same owner, individual airlines compete with each other instead of competing with others. The question is, however, whether this "independent" system will prioritize hubs exclusively based on profit.
DeleteI agree. Swiss has been by far the best run airline in the group, largely because (I believe) the decisions were made in CH.
DeleteI never understood LH group geography. Their hubs are too close to each other and naturally compete. If anything ITA is the one that makes sense as Rome complements Frankfurt as a base, where one can cover north and other south, providing good options to passengers too. If instead of Vienna and Brussels they had hubs in Spain and perhaps Scandinavia they wouldn't need to do any of this. Like look at US airlines and hubs they're strategically positioned to provide competitiveness and convenience, while EU big groups have hubs concentrated around similar areas cause the main drive in expansion is politics
Delete+1
DeleteThis won't end well
ReplyDeleteSome years ago, we were at sone meeting in Bruxelles, we were casually told, that strategic goal was to have 4-5 legacy carriers, few low cost and the rest - god help them. Same was to becine of european ATM ststems (Air Traffic Managment). Idea was to have Luftahansa, British, Air France, KLM and Iberia. Soon after that, Eurocontrol started to merge by force and with top-down approach so called Functional blocks of airspace, centalising en route centres for large chunks of airspace in one location (in case of ex-yu this block was called CEATS), and you saw what happend with legacy carriers....merger of KLM and Airfrance, Lufthansa being Borg and assimilating everything on their path.
ReplyDeletethis is not strategy that much as it is pure market dynamics. It is basically the same costs for everybody, but larger carriers can manger it better than smaller ones. That is why i don't think air baltic, Croatia airlines, finnair, or any other smaller EU carriers have any future as independent ones.
DeleteThis is quite annoying, especially if they are expanding Air Dolomite (which I love) and Eurowings/Discover - only loyalty program that works there is Miles and More; and not other Star Alliance cards.. Very frustrating how LHG with all these subsidiaries is trying to get the benefits of being in Star Alliance, while avoiding some of the associated costs (and benefits for others)...
ReplyDelete+100
DeleteWhere in ex-Yu is Lufthansa Group biggest?
ReplyDeleteIn terms of capacity probably BEG? In terms of being the biggest carrier by far? LJU, as every list on this site always shows.
DeleteI think they are rather strong in Croatia too considering they serve multiple airports with almost all of their airlines.
DeleteThis could also mean the end of seasonal Zurich-Nis flights
ReplyDeleteThose are primarily for P2P traffic, not transfers and there is no other Lufthansa Group airline flying there at all.
DeleteOut of all the routes in ex-Yu, this is probably the least likely to be impacted by this development.
DeleteVery interesting development. Let's see how it turns out.
ReplyDeleteGood for Lufthansa german airline, bad for anyone else.
DeleteCan't wait to read PIR's comments on this 😀
ReplyDeletePIR will say just two words, he often says : Danke Deutschland! Explains everything.
DeleteThis could be good news for Croatia Airlines routes to VIE, ZRH and BRU.
ReplyDeleteYeah, if they are ordered to do so.
Deleteagree with PIR
DeleteOn one hand it makes sense. On the other, I don't think the other LH group airlines will be happy.
ReplyDeleteThey made a mistake with buying into ITA. It's going to be a headache, like Alitalia was for every airline.
ReplyDeleteThey must be happy over at Brussels Airlines. They just narrowly avoided being merged into Eurowings a few years ago, now this.
ReplyDelete