The coronavirus pandemic continues to hit the aviation sector as German airline Lufthansa said on Thursday that it would have to slash 22,000 full-time jobs as it predicts a muted recovery in demand for travel. “The recovery in demand in the air transport sector will be slow in the foreseeable future,” the airline said, reports AFP.
About 100 aircraft will remain grounded after the crisis, leading to “a total of 22,000 fewer full-time positions in the Lufthansa Group, half of them in Germany”. The posts make up 16 percent of the Lufthansa Group’s total workforce of 135,000.
The airline said however that it would look at how it could use schemes for shorter work hours and other crisis arrangements to avoid outright redundancies.
“Without a significant reduction in personnel costs during the crisis, we will miss the opportunity of a better restart from the crisis and risk the Lufthansa group emerging from the crisis significantly weakened,” said Michael Niggemann, who heads the airline’s human resources and legal affairs departments, AFP reported.
Around 700 of the group’s 763 aircraft were grounded at the peak of the lockdowns and it was forced to put 87,000 workers on government-backed shorter hours schemes.
AFP reports, Lufthansa’s supervisory board last week approved a nine-billion-euro bailout deal from the German government. The bailout will see the government take a 20-percent stake in the group, with an option on a further five percent plus one share to block hostile takeovers.That would make the federal government Lufthansa’s biggest shareholder.
With the peak of the crisis over for now in Europe, the airline is plotting its restart, but uncertainties hang over many of its flight routes as the eye of the pandemic storm shifts elsewhere.
At the height of the crisis, about 90 percent of passenger connections at Lufthansa fell away, leaving an “emergency” timetable comparable to the 1950s. Daily passengers dwindled to 3,000 from the usual 350,000. The airline has also lost its place on Frankfurt’s Dax 30 index after its share price collapsed.
In April 2020, British Airways parent IAG announced it’s decision to slash up to 12,000 jobs as part of a restructuring forced on the carrier by the fallout from the coronavirus. IAG, which also notably holds Iberia and Vueling, said in a statement it was taking the decision on the basis that it believed it would be some years before air traffic volumes would return to normal.
The airline’s chief executive, Alex Cruz, told BA’s 42,000 staff in April that the company “must act decisively now to ensure that British Airways has a strong future” and that means more than one in four jobs must be cut.
The aviation sector world over has suffered due to the pandemic. An early prediction of this was made in March 2020 by global aviation consultancy firm CAPA which said, most airlines in the world will be bankrupt by the end of May and only a coordinated government and industry action could avoid the catastrophe. “As the impact of the coronavirus and multiple government travel reactions sweep through our world, many airlines have probably already been driven into technical bankruptcy, or are at least substantially in breach of debt covenants,” it had stated.
With inputs from AFP