Coronavirus: Germany’s Lufthansa to axe 26,000 jobs

Edmund HeaphyFinance and news reporter
Yahoo Finance UK
Lufthansa was forced to ground nearly all of its fleet for the past couple of months. (Matthias Schrader/AP)
Lufthansa was forced to ground nearly all of its fleet for the past couple of months. (Matthias Schrader/AP)

German flag carrier Lufthansa (LHA.DE) said on Thursday that it planned to axe 26,000 jobs, noting that it expected a “slow” recovery to demand within the airline industry.

Lufthansa said that it would operate 100 fewer aircraft following the coronavirus crisis, leading to an excess of 22,000 full-time positions, or 26,000 employees, across the Lufthansa Group.

Half of the job losses will fall on staff in Germany, the airline said.

Like all of its global competitors, Lufthansa was forced to ground nearly all of its fleet for the past couple of months, as coronavirus lockdowns brought the global aviation industry to a near-total standstill.

“The recovery in demand in the air transport sector will be slow in the foreseeable future,” the airline said on Thursday.

READ MORE: Lufthansa books €2bn loss as it plans drastic cost cuts

It suffered a 98% slump in passengers in April, and a 26% drop in passenger numbers in its first quarter compared with the same period last year.

That saw net losses in the quarter surge to €2.1bn (£1.87bn, $2.3bn), compared with losses of €342m during the same three months in 2019.

The airline warned earlier this month of cost-cutting measures, including job reductions. It had already instructed 87,000 of its around 137,000 staff to work fewer hours.

“Global air traffic has come to a virtual standstill in recent months. This has impacted our quarterly results to an unprecedented extent,” Lufthansa chief executive Carsten Spohr said.

The airline last month agreed to surrender landing slots at several of its German hubs in order to get approval for a €9bn bailout in Germany, which will see the German government take 20% stake in the airline.

The announcement at Lufthansa follows the release of two reports that paint a bleak picture for the global airline industry.

READ MORE: Airlines facing ‘worst year in history’ due to coronavirus crisis

The International Air Transport Association (IATA) said in its financial outlook report earlier this week that the global airline industry would lose $84bn (£66bn) this year. Revenue is expected to slump by 50% to $419bn.

“Financially, 2020 will go down as the worst year in the history of aviation,” Alexandre de Juniac, IATA’s director general said

A separate report from think tank the New Economic Forum warned that as many as 70,000 jobs linked to the aviation industry were at “immediate” risk due to the coronavirus pandemic.

The report compared the expected collapse in aviation employment to the rapid decline of the UK coal industry in the early 1980s, which left lasting economic scars on many communities.

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