Germany’s Lufthansa is the latest airline to be hit by the coronavirus pandemic, with some 30,000 of its 130,000 employees being at risk of losing their jobs.
Europe’s largest airline says it will have to scale down its winter schedule to levels it has not experienced since the 1970s thanks to the drastic decline in the number of people who are willing to risk flying during the coronavirus pandemic.
The carrier also owns its subsidiaries Swiss, Austrian, Brussels Airlines and Eurowings.
It is “harder than ever” to know how aviation industry will progress, Lufthansa’s executive board said in a letter to employees, as it isn’t known how long travel warnings will last or when recovery will come.
Other negative impacts include the increased use and acceptance of video conference technology, especially when factoring in attitudes towards traveling less so as to protect the environment, as well as decreased income for tourism, the board said.
“No one can reliably predict these effects. We are determined nevertheless to preserve at least 100,000 of the Lufthansa Group’s 130,000 current jobs. Even if we do not currently have nearly enough jobs for a workforce of this size,” the board said.
The German flag carrier had previously said that 22,000 people would lose their jobs, but in September they warned that the number would be significantly higher.
The airline has already been assisted by the German state, which in June took a 25 percent stake and gave some €9 billion to help keep the airline flying.
Lufthansa said it would be grounding 125 more planes than previously planned in the winter. That will mean the airline will be operating at about 25 percent of the capacity it had in 2019, as it expectts “less than a fifth” of that year’s passengers.
The season would be an “immense challenge”, it said.
“After a summer that gave us all reason for hope, we are now once again in a situation that is tantamount to a lockdown in effect.”
“We will be a smaller but also a more efficient Lufthansa. The road there will be long and arduous” the board said.
The airline has been successful in reducing its expenses, but clearly not by enough. The airline said it had cut its outflow of funds at the start of the pandemic from €1 million per hour, to that amount every two hours.
Lufthansa will now cut its administrative functions to around 30 percent, and close most of its main office in Frankfurt. Eurowings will be giving up all its office space in Dusseldorf.
Many of those who are able to hand onto their jobs will still face reduced income. The company will also extend the time that it keeps its employees on shorter work hours — now up to the end of February compared to the previous mid-December.
In preliminary third-quarter figures, Lufthansa reported an operating loss of €1.3 billion, but figures for the period up to the end of the year are now looking rather worse.