The Lufthansa Group has been set back 65 years in the space of 65 days, according to CEO Carsten Spohr. He made the comments during his speech as part of the group’s annual general meeting.
The Lufthansa Group yesterday held its first-ever digital AGM. The meeting saw stakeholders and CEO Carsten Spohr meet online to discuss the business. To kick off proceedings, Spohr gave a speech listing the current state of Lufthansa, and discussing the way forward. The contents of the statement were rather shocking as the industry is currently dealing with its biggest ever crisis.
Set back 65 years
Yesterday, Lufthansa’s CEO, Carsten Spohr, addressed his company’s shareholders from the Lufthansa Aviation Center in Frankfurt. Unsurprisingly, the central theme throughout Spohr’s speech was the current effect of the coronacrisis. Indeed, the airline is only flying around 3,000 passengers per day.
Lufthansa was founded in 1955, ten years after the conclusion of the Second World War. The airline was launched following a ten-year ban on flights enacted at the end of the war. Of course, at the time, the airline was a small undertaking with just a few planes, serving a divided Germany.
Since then, much has changed. The Lufthansa Group’s fleet has increased to encompass around 760 aircraft, spread across several national airlines. However, in his speech, Spohr stated the real gravity of the situation.
For 65 years – and through many crisis – we built this company on the foundations of our forefathers, turning Lufthansa into the no. 1 in Europe and an airline that has been among the best in the world for many years. In less than 65 days, we have returned to the flight plan levels of 65 years ago. That is extremely bitter, devastating and painful.
What does the future look like?
Lufthansa is currently working through a three-phase program looking at the future of the airline. These phases are:
- New Normal.
Currently, we are in the grounding phase, with some 700 aircraft not flying. This means that the airline group has practically no earnings, despite losing around €1 million ($1.08 million) per hour.
The airline is currently planning to start its recovery phase in July. This will see a significant expansion of the flight schedule, but the whole process of rebuilding the network will be a slow one, taking lots of time.
The new normal
While many Lufthansa Group airlines have said that they expect demand to recover by 2023, the airline won’t be what it was pre-crisis. Spohr told of how the airline will have to adjust to “the new normal.”
This will see the entire Lufthansa Group downsized. Indeed, around 100 aircraft are to be cut from the total fleet. All in all, the group will have some 10,000 employees too many. Job cuts could be on the horizon.
What do you think of Lufthansa’s 65-year leap back in time? Let us know your thoughts in the comments!