German airline Lufthansa told staff to prepare for more drastic cuts in its global workforce and the airline fleet it supports than previously planned, after a hoped-for recovery in air traffic fizzled out.
Recent rules that have forced travellers into quarantine have had a catastrophic effect on bookings, chief executive Carsten Spohr told a staff meeting on Tuesday. For October, seat reservations stand at less than 10 per cent of the levels experienced in the same period last year.
Lufthansa had said it planned to cut its fleet by about 100 jets and will have to shed the equivalent of 22,000 full-time positions. Mr Spohr said on Tuesday that he’s working on measures that will go further, according to people who attended the meeting.
While Lufthansa had planned to lift capacity gradually to about half of normal levels by December, Mr Spohr told staff he would probably now be satisfied if Lufthansa could offer 25 per cent of last year's seat sales. At the moment, traffic stands at less than 20 per cent of last year.
While the recovery of air traffic will take until the middle of the decade, it’s not clear when – if at all – revenue will recover to its 2019 record, given a decline in business travel that’s hit Lufthansa hard, Mr Spohr said. He dismissed reports about Lufthansa planning to cut up to 42,000 jobs as “way too high”, according to people in attendance.
Nevertheless, the German airline’s management will propose to its supervisory board a figure somewhere between that figure and the 22,000 positions it previously said it would shed.
The company also plans to decide next week which four-engine wide-body aircraft it may hold on to, the people said.
Lufthansa held negotiations with Airbus to potentially take some twin-engine A350s faster than planned if it feels it needs more modern replacement jets for all the thirsty old models that it may get rid of, Mr Spohr told the employees. Those extra jets may be leased rather than bought in light of the group’s cash-preservation priorities.
