Lufthansa to slash 22,000 jobs amid Covid-19 crisis
German flag carrier Lufthansa became the latest airline to announce massive job cuts as warned of a slow recovery from the impact of the coronavirus pandemic.
Deutsche Lufthansa AG
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18:55 30/05/24
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Lufthansa on Thursday said it would axe 26,000 jobs across 22,000 positions and fly 100 fewer aircraft. Half the job cuts would be in Germany.
Airlines across the world have grounded the majority of their fleets as governments imposed lockdowns to stymie the spread of the virus that has so far killed 408,000 people globally. The resultant slump in demand has left them burning through cash reserves, even with state bailouts.
“The recovery in demand in the air transport sector will be slow in the foreseeable future,” the airline said on Thursday.
Lufthansa suffered a 98% slump in April passengers numbers, and a 26% year-on-year fall in the first quarter.
It last week reported that first quarterly net losses blew out to €2.1bn (£1.87bn) compared with losses of €342m a year earlier.
“Global air traffic has come to a virtual standstill in recent months. This has impacted our quarterly results to an unprecedented extent,” said chief executive Carsten Spohr.
“Without a significant reduction in personnel costs during the crisis, we will miss the opportunity of a better restart from the crisis and risk the Lufthansa group emerging from the crisis significantly weakened,” said the company's labour director Michael Niggemann.
The airline last month agreed to surrender landing slots at several of its German hubs in order to get approval for a €9bn bailout in Germany, which will see the German government take 20% stake in the airline with an option on a further 5% plus one share to block hostile takeovers.
That would make the federal government Lufthansa’s biggest shareholder. The group is to ask its shareholders to back the accord at an online meeting on June 25 plus approval from European competition authorities.
The International Air Transport Association (IATA) earlier this week said the global airline industry would lose $84bn (£66bn) this year, with revenue expected to slump by half to $419bn.