Germany’s Lufthansa is readying to cut nearly 30,000 jobs this month, with a further 10,000 set to go in 2021. A German newspaper reported the news at the weekend. The airline is targeting employee roles outside Germany and plans to sell its catering unit LSG this month. Next year, cuts will get made closer to home, with 10,000 Germany based jobs to go.
Lufthansa roles outside Germany targeted to go
A widely cited report about the job losses was carried in the Bild am Sonntag newspaper on Sunday. That report appears to be a reaffirmation of a letter sent in October by the Lufthansa board to its roughly 130,000 employees. That letter said the aviation environment was unclear and difficult to predict.
“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.
“After a summer that gave us all reason for hope, we are now once again in a situation that is tantamount to a lockdown in effect.”
Included in the Lufthansa Group are Lufthansa, SWISS, Austrian, Brussels Airlines, and Eurowings.
According to Reuters, Lufthansa will shed 7,500 jobs by selling LSG. The bulk of the remaining losses (20,000) will be from Lufthansa Group roles based outside Germany.
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New Year travel bookings strong for Lufthansa
The letter said the job losses were necessary to cut costs and ride the travel downturn out. The airline group is reportedly bleeding US$14.5 million per day. Earlier this year, the bleed rate was twice that. In September, the airline had flagged job losses of around 22,000 employees, but these latest numbers exceed that.
Germany went into a partial lockdown in early November. News of that may have lead to Lufthansa’s pessimistic outlook and letter to its employees. That partial lockdown is now extended into January.
But that lockdown looks like leading to a case of cabin fever among many Germans. While Lufthansa looks set to follow up on the warning in its October letter, the airline is reportedly enjoying also buoyant demand and bookings across multiple destinations for the new year.
Late last week, Lufthansa said bookings were up by 400% (on the previous week) to some international destinations as well as to Southern and Northern Europe.
The longing to travel is great worldwide. As soon as travel restrictions fall, we see a significant increase in bookings,” said Harry Hohmeister, an executive at Lufthansa.
Lufthansa pessimistic about next few years
But this is not enough to save the jobs at Lufthansa. According to the Reuters report, Lufthansa has spent US$3.64 billion of a government bailout it received earlier this year and has too many employees on its books. The airline announced a US$1.6 billion loss in the last financial quarter.
The Lufthansa Group thinks it will take years for the airline industry to recover to 2019 levels. So far this year, it has cut airline schedules, fleet size, and employee numbers across the group.
Over the current financial quarter, the Lufthansa Group says it expects to operate at about 25% of its normal capacity.
There are reports Lufthansa will make a formal announcement about the job cuts on Monday.