The German airline group Lufthansa, of which Brussels Airlines is a part, has to tighten the belt even further. At least 150 aircraft from a fleet of 760 will no longer take to the air. And the number of jobs that will have to disappear from the group will be higher than the previously announced 22,000. Lufthansa announced this on Monday. The group is currently losing 500 million euros per month.
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Lufthansa announced the third package within its restructuring program on Monday. That starts with the conclusion that the forecasts for passenger traffic have deteriorated again in recent weeks. “As the end of the summer season approaches, passenger numbers and bookings are declining again after there were slight signs of recovery in July and August,” the airline group said.
Forecasts not sustainable
The earlier forecast that passenger airlines would be able to run at half capacity again in the fourth quarter is therefore no longer tenable. If the current trend continues, Lufthansa expects to be at only 20 to 30 percent compared to 2019.
This also has consequences for operations. Until now, Lufthansa expected to reduce the fleet by 100 aircraft, that number will now be 150. For example, all superjumbos Airbus A380 will be parked for a long time, and A340s will also be taken out of circulation. “They will only be reactivated in the event of an unexpectedly fast market recovery,” he said. This will lead to an impairment loss of 1.1 billion euros in the third quarter.
Lufthansa also indicates that more jobs will have to be lost than the 22,000 full-time equivalents previously announced. It is not yet clear how many jobs are involved. The group previously stated that each aircraft represents 100 runways, so the potential would be 5,000 additional runways that are in draft. What is already clear is that one fifth of management positions will be overhauled. At the beginning of this year, more than 138,000 people worked for the group.
The airline group hopes that the interventions will help limit cash loss during the winter season to 400 million euros per month. It does, however, maintain its intention to generate positive cash flow again in the course of 2021.
The Lufthansa share lost more than 7 percent on the Frankfurt stock exchange around 3.20 pm on Monday.
Already 9 billion in state aid
The Lufthansa group received a total of 9 billion euros in state aid from its four ‘home countries’ (Germany, Austria, Switzerland and Belgium) to survive the corona crisis. In July, an agreement was reached with the Belgian state on a support package for subsidiary Brussels Airlines totaling 460 million euros: 290 million euros from Belgium and 170 million euros from Lufthansa itself.
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