Lufthansa warns of more job cuts as travel recovery stalls
Lufthansa shares lost nearly a tenth of their value this afternoon after the German flag carrier said that it would cut more jobs on top of the 22,000 redundancies previously announced.
This afternoon the airline revealed that due to the stalling recovery in air travel it would have to reduce its fleet by 150 planes, 50 more than it had planned.
As a result, it said that there would have to be extra job cuts, but did not specify how many more roles would be lost. After getting rid of the planes, Lufthansa’s fleet will number around 610.
The announcement came as the airline, which was given a €9bn state bailout in the summer, said that it had slashed its capacity for the fourth quarter due to the lack of demand.
Previously the carrier had anticipated flying at 50 per cent capacity, but due to an expected lack of demand it said that it would now fly between 20 and 30 per cent.
Recent weeks have seen a number of carriers, including Ryanair and Easyjet, make similar cuts as a combination of travel bans and quarantine restrictions have choked the travel industry’s nascent recovery.
In addition, Lufthansa announced that it would take a €1.1bn impairment charge on the value of its aircraft.
The airline said that it would attempt to cut its monthly cash burn by €100m over the winter, taking it to €400m overall.
In the first quarter of next year it is planning to slash 20 per cent of managerial positions, as well as 30 per cent of its office space in Germany.