Lufthansa shares: capitulation on the domestic market?

Lufthansa CEO Jens Ritter announces possible route cancellations at seven German airports, citing high location costs and tax burdens. Analysts at JPMorgan remain skeptical, with an underweight rating.

The crane is becoming rebellious: While Lufthansa CEO Jens Ritter openly threatens to cancel German flights, analysts are reaffirming their pessimistic stance. The message is clear – the high costs of locating in Germany are making life difficult for the company. But what does this mean for investors when one of Europe's largest airlines questions its home base?

Open revolt: CEO threatens clear-cutting

Lufthansa Airlines CEO Jens Ritter's words are telling. Bremen, Dresden, Cologne, Leipzig, Münster, Nuremberg, and Stuttgart – no fewer than seven German airports are on his list of cuts. "If connections become unprofitable, we will be forced to reduce routes and redeploy the aircraft elsewhere," Ritter announced this week.

The reason for this drastic announcement? The exploding site costs and new tax burdens imposed by the federal government without appropriate compensation. A slap in the face for German aviation policy – and a warning signal for all those who have relied on a strong home network for the crane-carrying airline.

The most important facts about the current situation: – Seven German airports threatened with cancellations – Reason: Increased location costs and new tax burden – Lufthansa wants to shift aircraft to more profitable markets

– Management exerts public pressure on politicians

JPMorgan remains skeptical: Negative news expected

At the same time, pressure from analysts is intensifying. Major US bank JPMorgan reiterated its "Underweight" rating and maintains its "Negative Catalyst Watch" status. Analyst Harry Gowers is signaling that further bad news is expected in the short term, which could weigh on the share price.

Particularly explosive: This warning applies ahead of the upcoming quarterly report at the end of October. While the Capital Markets Day on September 29 could still provide some positive surprises, operating earnings estimates through 2027 remain pessimistic.

Should investors sell immediately? Or is it still worth investing in Lufthansa ?

Turning point or bluff?

The irony of the situation is obvious. At a time when Lufthansa is reporting operational successes—best punctuality figures in Munich in eleven years and positive quarterly figures—management is questioning its strategic direction in its home market.

Is this a clever move to build political pressure? Or is it actually the beginning of a fundamental reorientation away from the German market? The stock, which has performed quite respectably despite the turmoil, gaining nearly 24 percent since the beginning of the year, is facing a directional decision.

The Capital Markets Day on September 29 will show whether Ritter's threats are pure negotiating tactics or whether the company is serious about its departure from German skies.

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