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Lufthansa plans to increases number of grounded planes and job cuts

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Lufthansa plans to increases number of grounded planes and job cuts

Old 21st Sep 2020, 14:03
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Lufthansa plans to increases number of grounded planes and job cuts

https://www.focus.de/finanzen/boerse..._12456237.html

The existing operational plan envisaged grounding 100 planes, but that figure is being increased to 150 ( of 760 total ) including all A 380 as well as ( some/all ? ) A 340-600. This is based on only being able to fly 20%-30% of flights against the 50% originally forecast by year-end. Losses are running at € 500 Mn per month and it is planned to reduce this to € 400 Mn by year-end. Bankruptcy for the highly-indebted company has only been able to be averted by aid totalling € 9 Bn ( Mrd in German/French ) from the four states involved .

There were 138 000 permanent employees at the beginning of the year ( 10 000 already left the company ) and original planning foresaw a reduction of 22 000, however this figure will now be increased although the report does not specify by how many.

Last edited by Tartiflette Fan; 21st Sep 2020 at 17:43.
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Old 21st Sep 2020, 15:43
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Maybe some companies/countries simply need to learn how to play the EU game rather than sitting on the sidelines grumbling...

If an aid/finance package is approved by the EU commission then by definition it's not illegal under EU rules......

https://ec.europa.eu/commission/pres.../en/ip_20_1179
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Old 21st Sep 2020, 19:25
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thegypsy

You might want to read another newspaper then the sun or the daily fail. It might really enlighten you.

Both LOANS (for a pretty bad intrest rate compared to market interest rates) have been approved by the EU and come with massive restrictions with regards to the future operation (less night flying, board seats for the government etc.) That is exactly the reason BA is trying to avoid a government loan at every cost.
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Old 21st Sep 2020, 20:42
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Were the big flag carriers to go bust, say AF,BA,LH, EI, IB or SK, what consequences would arise?

My thought is that they would simply be re-established by their respective governments, and subsequently maintained, as the AZ basket-case in Italy has been for so many years.
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Old 21st Sep 2020, 21:19
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Very important stock-market - and therefore pension - losses, as they are they would all likely be in the top segment ( like FTSE 100, DAX, CAC 40 ) of their national market and therefore likely investments in both active and passive funds.
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Old 21st Sep 2020, 22:25
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They will retire the A380 and A340. Unless they won't. Except if they face enough demand for it soon. But how soon - nobody knows.

Doesn't that sound a lot like the early May talk about "an entire summer on the ground"? To me, it does. The German government will never, ever let Lufthansa go bust or shrink too much as it will be a massive blow to the international image of Germany as a leading economic force. Hence, sounds a lot like blackmailing for some extra cash and other benefits. Like, maybe letting a competitor or five go bust and buying them for peanuts afterwards. Or like keeping the LCCs away from the precious slots at MUC, FRA and whatever airport Berlin ends up with. This is all as much about politics as it is about aviation, economy and anything else.
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Old 22nd Sep 2020, 04:08
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Posters, you're welcome to discuss Lufthansa fleet and operations changes. Please leave the politics and accusations out of posts....
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Old 30th Sep 2020, 04:59
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LH stopped all their flight school activities. Students are told to cancel their career. School operations in Bremen and Rostock are stopped. They open only a few weeks for those on theirs last hours. Usual contract was, that you had to repay the course, if you did not get a job in the Lufthansa or attached airlines within 5 years.

Link to a Gernan newspaper:
https://www.sueddeutsche.de/wirtscha...hule-1.5049824

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Old 30th Sep 2020, 05:36
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PilotLZ

There's no doubt its like that, no news in here.
LH is the marketing arm of the German government since ages. Unions are powerful and they decide along with the other key people.
Actually thats the way any serious airline should be.
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Old 30th Sep 2020, 05:37
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Posters, you're welcome to discuss Lufthansa fleet and operations changes. Please leave the politics and accusations out of posts....

May I politely ask for a little clarification on that? I get (and applaud) you don't want party party political ranting in this thread, or better still any outside of Jet Blast but trying to discuss the future of international commercial aviation without speculating about the degree of state involvement is kinda pointless is it not. State aid to aviation is inevitable, as is wholly or partially state owned flag carriers.
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Old 30th Sep 2020, 09:37
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The airlines are in survival mode now. Especially the large ones with long range international routes , From the latest data released yesterday , LH is doing worse than others with only 29% of flights operating compared to same period last year . Most others (except BA) are around 50% . Even German domestic traffic is down compared to previous weeks . They have to do something to survive the winter. and measures like those described by EDLB above are only the beginning I fear. I feel very sorry for them , One of the finest airline in nearly all aspects.
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Old 30th Sep 2020, 10:14
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To make my question specific only to LH, I ask whether LH is likely to be nationalised? This would presumably prevent wholesale job cuts and grounding of the airline in toto, should the existing market conditions prevail for much longer.

(And I do wonder whether other former state-supported flag carriers of similar profiles to LH may soon be re-nationalised?)
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Old 30th Sep 2020, 10:24
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Looks like they might need another rescue package but the government doesn't seem to want to go back to owning an airline in general. More likely that LH might sell some of it's assets to generate future cash.
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Old 1st Oct 2020, 08:20
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RoyHudd

It won’t happen in the U.K. how do you nationalise an airline with a HQ in Spain, and large share holding by Qatar? Or do you state find the airline that will most likley pay you back the quickest, so one of the SH lot, but each one has similar multi national ownership and HQ issues.
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Old 1st Oct 2020, 10:27
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Originally Posted by ATC Watcher View Post
only 29% of flights operating compared to same period last year . Most others (except BA) are around 50%..
I think the direct problem is not the limited number of flights, but the abysmal load factor (and yields) on most the flights that are flying.

On a sidenote: KLM is saying that the percentage of destinations being served is at 80-90 percent. That most of them are at only once or twice a week, vs. once a day before Covid, is something they do not mention.
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Old 3rd Oct 2020, 08:22
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To be honest, i dont think the upcoming winter will worsen the situation. Simply because it cant get worse than it is right now. Probably the same loadfactors as today. (A small positive note in dark times)
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Old 3rd Oct 2020, 09:24
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I also heard from reasonably well informed sources that LH has been losing 500 million a month and that savings were reducing that by maybe 100 million. the great unknown is how long the current situation will continue. The North Atlantic business is currently weak and that was funding a lot of the rest.
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Old 3rd Oct 2020, 15:49
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Would this well-informed source be the Lufthansa public-statement reported on September 21st ?

"Gleichwohl verliert das Unternehmen in der anhaltenden Corona-Flaute jeden Monat 500 Millionen Euro liquide Mittel. Diese Zahl soll bis zum Winter auf 400 Millionen Euro sinken, unter anderem mit dem Verzicht auf angemietete Büroflächen."

https://www.focus.de/finanzen/boerse..._12456237.html

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Old 3rd Oct 2020, 16:30
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Same, same but different as they say! Your original post a couple of weeks ago led me to discuss this with some well informed sources. The numbers continue to be dire, which is not exactly late breaking news. The bit that shocked me is how long they think it could be till business gets back to somewhere approaching normal. There are also some mixed messages coming from various group companies. Swiss for example is reported to be trying to avoid redundancies, while Eurowings say they are switching maintenance from LH Technic to Nayak, which hardly sounds like it will secure group jobs. It seems to depend on luck and maybe how politically important your bit of the business is, as to whether you can look forward to continued employment.
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Old 3rd Oct 2020, 22:42
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Do you know if any of the "national' governments i.e. Switzerland or Austria, have contributed any money to the support schemes ? I haven't read anything at all.
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