2020 has been an unforgiving year for commercial aviation. Airlines worldwide have had to cut staff as a result of a lack of revenue. This is primarily due to the vastly reduced passenger numbers caused by the ongoing coronavirus pandemic. However, Lufthansa has avoided laying off 5,000 of its pilots after agreeing on cost-saving measures with the pilots’ union.
A difficult year for Lufthansa
Despite its pedigree in the industry, Lufthansa and its partner airlines have not been immune from the challenges faced by commercial aviation this year. The industry-wide economic downturn caused by COVID-19 has forced the German flag carrier to make cuts to both its fleet and its staff.
In terms of the airline’s fleet, it is unlikely to return its remaining A380 aircraft to service. Lufthansa’s management announced this after the publication of its third-quarter results. It has also been forced to store a number of its Boeing 747-8 aircraft. These are presently sitting on Frankfurt International’s inactive north-western runway 07L/25R. This has been closed since December 14th.
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From a human resources perspective, Lufthansa’s Q3 results showed a surplus of approximately 1,100 pilots. At this time, it had already cut 14,000 jobs since the start of the year. This resulted in savings of around €900 million ($1.1 billion), but it appears that further cuts are on their way. Indeed, Simple Flying reported earlier this month that a further 30,000 job cuts were expected abroad by the end of the year. A further 10,000 jobs within Germany are likely to be cut in 2021. However, the airline has been able to secure around 5,000 pilot jobs.
Successful negotiations with the pilots’ union
Lufthansa announced today that it had secured 5,000 pilot jobs until March 2022. In a press release seen by Simple Flying, the airline stated that:
“Lufthansa and the pilots’ union Vereinigung Cockpit (VC) have agreed on pilots’ contributions to help manage the crisis. The agreement runs until March 31st 2022. Current cost-saving measures will not only be continued in the coming year but also supplemented by additional measures.”
The aforementioned additional measures include the following cost-saving implementations:
- Reduced working hours for pilots (with salaries adjusted accordingly).
- The airline has suspended collective pay increases.
- Next year will see an extension of short-time work for pilots.
In addition to Lufthansa’s passenger pilots, its measures will also affect flight deck crew at Lufthansa Cargo and Lufthansa Aviation Training, as well as a subgroup of Germanwings pilots. The result of the measures agreed following negotiations with the pilots’ union is that 5,000 jobs have been secured. As per the release, the airline stated that, as a result:
“Lufthansa is ruling out layoffs of pilots for operational reasons at Lufthansa, Lufthansa Cargo, Lufthansa Aviation Training and a subgroup of Germanwings pilots until March 2022.”
Looking to the future
Moving forward, Lufthansa says that it hopes to continue negotiations next year “under more predictable conditions, (…) in order to reach an agreement on sustainable solutions for the time after the crisis collective agreement expires.” This will aim to ensure that it can continue to avoid layoffs even after March 2022.
Operationally speaking, Lufthansa’s future appears to be relatively bright, given the circumstances. Indeed, Simple Flying reported earlier this month that the upcoming holiday season has led to a significant surge in bookings with the airline. Certain winter sun destinations, such as South Africa and the Canary Islands, saw increases of up to 400%.
What do you make of Lufthansa’s cost-saving measures? How do you see the airline’s future panning out? Let us know your thoughts in the comments.