Lufthansa has announced further cuts to its fleet and workforce along with a €1.1 billion impairment on idled aircraft as Europe's worsening coronavirus situation spreads gloom across the airline sector.
The German airline group, which has been hit hard by its reliance on Asian and other long-haul routes as well as stalled business travel, said that it now expects to operate at only 20%-30% of capacity in the fourth quarter.
"The outlook for international air traffic has significantly worsened in recent weeks," it said.
Lufthansa now plans to reduce its fleet by 150 aircraft, which is 50 more than previously planned, and cut more jobs than the 22,000 full-time equivalent positions already identified as surplus.
Lufthansa, which also owns Austrian Airlines and Eurowings, said that it will transfer its eight remaining Airbus A380 superjumbos and 10 A340 jets to long-term storage.
Aiming To Reduce Cash Burn
Lufthansa, which had previously hoped to limit compulsory redundancies by reducing pay and hours, said that it will now talk to unions about deeper cuts as it aims to reduce its monthly cash burn to €400 million from €500 million.
"It's clear to everyone that Lufthansa can't go on without cuts," said Mira Neumaier, a spokeswoman for the Verdi union, adding that "job cuts alone will not save the company".
By early 2021, management positions will be cut by 20% and administrative office space in Germany by 30%, Lufthansa said.
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