Lufthansa on Monday has announced that alongside reducing its workforce, it will further cut its fleet by decommissioning more than 150 aircraft and all 14 of its Airbus A380s would be put in long-term storage, along with 10 A340-600s and will only be reactivated if there’s a short-term unexpected increase in demand.
The German carrier is making this announcement despite the €9bn bailout it received from Berlin in June. This recent development has become necessary as Europe’s worsening coronavirus situation spread gloom across the airline sector.
Earlier in April, Lufthansa Group has announced that it would reduce its fleet size by 100 aircraft, and that number is now being increased to 150 aircraft. With this, it means the airline will now operate at only 20-30% of capacity in the fourth quarter.
The airline also said 20 per cent of management positions will be cut next year, as it also plans to ‘further adjust’ its excess 22,000 staff stating noting that staff strength will continue to be adjusted going forward, given the uncertainty about the future.
Lufthansa has revealed that the outlook for international air traffic has significantly worsened in recent weeks. With the summer travel season coming to an end, passenger and booking numbers are declining again, after slight signs of a recovery in July and August.
Lufthansa Group had expected that passenger numbers would reach 50% of pre-corona virus levels by the fourth quarter of 2020, this prediction however seems unrealistic as current trends show figures to be somewhere around 20-30% of last year’s levels.
The airline says the final number of job reductions will be negotiated with employee representatives.
It said it was hoping to reduce cash burn to 400million euros ($470 million) a month this winter from 500 million euros a month presently. Management is staying with its prediction that it will return to positive operating cash flow some time in 2021.
