Lufthansa Warns 30,000 Jobs May be Cut

posted on 27th October 2020 by Eddie Saunders
Lufthansa Warns 30,000 Jobs May be Cut

By John Huston,

Lufthansa (LH) has warned that 30,000 jobs are under threat as it scales down its winter schedule to levels not seen since the 1970s. The airline cites the corona virus pandemic as the reason for the cutbacks.

The executive board of Europe’s largest airline said in a letter to employees that it was now “harder than ever” to predict how the aviation industry will go forward. There is little clarity over how long travel warnings will apply or how quickly any recovery could come.

Environmental concerns and the use of video conferences may have also changed attitudes about travel. And pressures on income is likely to cut back on tourism, the board wrote in the letter.

“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 work for a workforce of this size,” it added.

More Cutbacks than Anticipated

Lufthansa in September said job cuts would exceed the 22,000 previously announced but did not give an exact figure then. In June, Germany stepped in to take a 25% stake in the airline, pumping in nine billion euros of liquidity. The carrier – including its subsidiaries Swiss (LX), Austrian (OS), Brussels Airlines (SM) and Eurowings (EW) — said it would ground 125 more planes than planned in the winter, offering a maximum of a quarter of 2019’s capacity as it anticipates “less than a fifth” of the previous 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 lock down in effect,” the airline’s board said in the letter. “As the travel industry adapts to a post-pandemic world we will be a smaller but also a more efficient Lufthansa. The road there will be long and arduous.”

According to the letter, LH has cut its outflow of funds from €1M (US$1.18M) per hour at the start of the pandemic to “only” €1M every two hours now. The cutbacks will reduce administrative functions around 30 percent and shutter most of its main office in Frankfurt.

EW will entirely give up its office space in Dusseldorf. The company will keep employees on shorter work hours for a longer time — up to the end of February from mid-December.

Lufthansa reported an operating loss of 1.3 billion euros in preliminary third-quarter figures.