Lufthansa to cut more jobs as it loses €500m a month

Aircraft of German airline Lufthansa at the airport in Munich. (AFP)
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Updated 22 September 2020

Lufthansa to cut more jobs as it loses €500m a month

  • The largest German airline says it now plans to reduce its fleet by 150 planes by 2025

FRANKFURT: Lufthansa said Monday it will slash more jobs on top of 22,000 previously announced cuts and put more planes out of service with current losses running at some €500 million ($590 million) a month.

With demand set to be lower than expected through winter as the coronavirus pandemic continues to severely curtail travel, the airline said it now plans to reduce its fleet by 150 planes by 2025.

It had previously estimated it would have to scrap 100 aircraft in response to the unprecedented crisis in the aviation sector.

Lufthansa, which received a government bailout worth €9 billion in June, said it would have to book 1.1 billion in impairment over its fleet decision.

And “the previously announced personnel surplus amounting to 22,000 full-time positions will increase as a result of the decisions taken,” it said.

The group did not give a figure for further job cuts, but said it would engage in talks with labor representatives to “limit the number of necessary redundancies.”

Managers will also be hit, with one in five management positions to go in the first quarter of 2021.

A resurgence in infections across Europe meant that after a brief uptick in demand over the summer months, Lufthansa’s previous assumption that demand could reach half of last year’s “no longer seems realistic.”

Germany is also planning new rules from October, requiring travelers arriving from risk zones to go into quarantine for at least five days before taking a test.

That would essentially rule out intra-Europe weekend city hops — something which had resumed over the summer months.

“The continuing high level of uncertainty in global air traffic makes short-term adjustments to the current market situation unavoidable for the foreseeable future,” said the group.

As part of its fleet reduction, the airline said it has been forced to put its eight remaining A380s as well as 10 A340-600s into deep storage.

Six A380s had already been taken out of service earlier this year.


Britain, EU tell each other to move on trade

Updated 20 October 2020

Britain, EU tell each other to move on trade

  • Both sides call on each other to protect billions of dollars of trade between the neighbors

BRUSSELS: Britain and the EU said on Monday the door was still open for a deal on their post-Brexit relationship, calling on each other to compromise to find a way to protect billions of dollars of trade between the neighbors.

With just over two months before Britain ends a status quo transition arrangement with the EU, talks on a trade deal are deadlocked, with neither wanting to move first to offer concessions.

A no-deal finale to Britain’s five-year Brexit drama would disrupt the operations of manufacturers, retailers, farmers and nearly every other sector — just as the economic hit from the coronavirus pandemic worsens.

European Commission Vice President Maros Sefcovic repeated on Monday that the EU still wanted a trade deal but not “at any cost” after British Prime Minister Boris Johnson said on Friday there was no point in continuing talks.

“It has to be a fair agreement for both sides — we are not going to sign an agreement at any cost,” Sefcovic told reporters after meeting Michael Gove, Britain’s point man on the existing divorce agreement, in London.

“The EU is ready to work until the last minute for a good agreement for both parties,” Sefcovic said.

Britain, increasingly frustrated by the EU’s refusal to start text-based talks, called on the bloc to make the first move, with its housing minister saying that Brussels only had to make “some relatively small but important changes.”

Housing Secretary Robert Jenrick called on the EU to “go that extra mile, to come closer to us on the points that remain for discussion.”

A spokesman for Johnson again ruled out prolonging any negotiation beyond the end of this year, when the transition period runs out, saying the EU “must be ready to discuss the detailed legal text of a treaty in all areas with a genuine wish to respect UK sovereignty and independence.”

EU chief negotiator Michel Barnier had been due in London for talks with British counterpart David Frost this week. Instead, they will now speak by telephone on Monday to discuss the structure of future talks, Barnier’s spokesman said.

Negotiations broke down on Thursday, when the EU demanded Britain give ground. Issues still to be resolved include fair competition rules, including state aid and fisheries. EU diplomats and officials cast Johnson’s move as a frantic bid to secure concessions before a last-minute deal was done, and European leaders have asked Barnier to continue talks.

British officials have repeatedly said any deal has to honor Britain’s new status as a sovereign country and not try to tie it to EU rules and regulations.

German Chancellor Angela Merkel said compromises on both sides would be needed. French President Emmanuel Macron said Britain needed a deal more than the 27-nation EU.

Britain is launching a campaign this week urging businesses to step up preparations for a no-deal departure. In a statement accompanying the launch, Gove says: “Make no mistake, there are changes coming in just 75 days and time is running out for businesses to act.”

More than 70 British business groups representing over 7 million workers on Sunday urged politicians to get back to the negotiating table next week and strike a deal.