Since the beginning of the year, the Swiss parent company has recorded a loss of more than four billion euros. The board of directors cut costs significantly, but it wasn’t enough. Now even more savings have to be made and more machines have to be shut down for now.
The renewed escalation of the corona pandemic and the expansion of travel restrictions are putting the Lufthansa Group in even more trouble. The group loses around € 1 million in two hours, or € 12 million per day. This is still a huge money loss rate, even though the company also lost € 1 million per hour at the start of the pandemic. For the winter semester, management expects the number of passengers to be less than 20% compared to the previous year, as stated in a letter from the board of directors to employees sent to NZZ on Sunday. In historical comparison, the company is at the level of the mid-1970s. At that time Lufthansa had around 80 “cross-country aircraft” in use.
Divisions should go into hibernation
In view of this development, the group, which also includes the Swiss, Austrian Airlines, Brussels Airlines and Eurowings brands, must cut costs further. 125 aircraft, which were actually destined for the already heavily reduced winter flight program, are to be decommissioned again. The company wants to put many areas in “winter mode” from mid-December and, for example, close the administrative headquarters of the Group with the exception of a few employees. This is the so-called Lufthansa Aviation Center (LAC), which is the headquarters of the group right at Frankfurt Airport. The current company headquarters is in Cologne.
In Germany, the management also wants to concentrate more flight operations on Frankfurt am Main. To this end, another four A350s can be transferred from Munich to the Main. The concentration makes it easier for the company to fill the few long-haul planes that still fly overseas. Long-haul traffic has basically come to a halt. In the Swiss branch Swiss, it is rumored that the CEO of the Airbus A320 may be taken out of service. At Austrian Airlines, the Boeing 777s no longer have to take off for the moment. Overall, the company expects the group’s airlines to be able to offer up to a quarter of the previous year’s capacity, some brands would even be significantly lower.
Loss of four billion euros in nine months
The group announced the first data for the third quarter a few days ago. Subsequently, before taxes and interest, there was a loss of almost € 1.3 billion, at least significantly less than the loss of € 1.7 billion in the second quarter. Over the year to date, however, the group has already recorded a loss of over € 4 billion. Thanks to generous state aid from the Group’s various countries of origin, liquidity at the end of September was still a good 10 billion euros. The company announced the third savings package just about a month ago. This included, among other things, the reduction of the fleet by 150 aircraft instead of 100 and the elimination of 27,000 full-time positions instead of the previously announced 22,000 positions.
You can contact the corporate editor Michael Rasch Twitter, LinkedIn and Xing as well as NZZ Frankfurt on Facebook.