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Lufthansa set to cut 10,000 more jobs in Germany

written by Hannah Dowling | May 4, 2021
A Lufthansa Airbus A380. (Rob Finlayson)
A Lufthansa Airbus A380. (Rob Finlayson)

Lufthansa Group, which owns the German flag carrier as well as Austrian Airlines, Swiss and Eurowings, will look to permanently reduce its workforce in Germany by another 10,000, after already shrinking its workforce by 20 per cent in the last 12 months.

The group’s chief financial officer, Remco Steenbergen, revealed on an analysts call that while the group has already shrunk its workforce by around 24,000 full-time equivalent employees, the bulk of this number came from outside of Germany.

While the airline group’s German operations were reduced by around 8,000 employees, it continues to see a “personnel surplus of around 10,000 full-time equivalents”, according to Steenbergen.

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The group said it hopes to “address” the employee surplus in “mutual agreement” with workers’ unions, once its current COVID-induced short-term agreements come to an end. Such agreements ruled out any forced dismissals until the first quarter of 2022.

Steenbergen stressed that the airline group hopes to reduce the number of staff that are left without work, however said this will be achieved through placing more workers on part-time contracts.

“In this context we are proposing the implementation of innovative part-time models, which allow keeping as many colleagues as possible on board in the short-term, while providing maximum flexibility to grow the business again in the long term,” he said.

Despite this commitment, the group is still “preparing for forced dismissals” once short-term union agreements expire in the next 12 months.

“We expect the necessary legal process to be completed by the end of this year, so that dismissals will be possible once the current union agreements expire,” Steenbergen said.

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Lufthansa reported a quarterly net loss of US$1.2 billion for Q1 2021, as legacy airlines continue to struggle against budget carriers for the ongoingly little demand for air travel.

However, Lufthansa’s cargo and maintenance divisions were bright spots for the struggling mainline.

Lufthansa Cargo saw a cool US$378 million profit for the quarter, off the back of rising freight prices and soaring demand for cargo capacity.

Meanwhile, MRO subsidiary Lufthansa Technik also saw a strong quarterly result, with a US$19 million profit, driven largely by its operations in the US and China.

Overall, Lufthansa is expecting to operate at just 40 per cent of its pre-COVID capacity for the full-year 2021.

The airline had made earlier estimations that it would operate at up to 60 per cent of its pre-COVID capacity over the year.

Lufthansa previously reported an US$8.1 billion loss in its full-year 2020 result, as well as a US$1.38 billion net loss in the fourth quarter alone.

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