Lufthansa to cut more jobs as it loses €500m a month

Aircraft of German airline Lufthansa at the airport in Munich. (AFP)
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Updated 22 September 2020

Lufthansa to cut more jobs as it loses €500m a month

  • The largest German airline says it now plans to reduce its fleet by 150 planes by 2025

FRANKFURT: Lufthansa said Monday it will slash more jobs on top of 22,000 previously announced cuts and put more planes out of service with current losses running at some €500 million ($590 million) a month.

With demand set to be lower than expected through winter as the coronavirus pandemic continues to severely curtail travel, the airline said it now plans to reduce its fleet by 150 planes by 2025.

It had previously estimated it would have to scrap 100 aircraft in response to the unprecedented crisis in the aviation sector.

Lufthansa, which received a government bailout worth €9 billion in June, said it would have to book 1.1 billion in impairment over its fleet decision.

And “the previously announced personnel surplus amounting to 22,000 full-time positions will increase as a result of the decisions taken,” it said.

The group did not give a figure for further job cuts, but said it would engage in talks with labor representatives to “limit the number of necessary redundancies.”

Managers will also be hit, with one in five management positions to go in the first quarter of 2021.

A resurgence in infections across Europe meant that after a brief uptick in demand over the summer months, Lufthansa’s previous assumption that demand could reach half of last year’s “no longer seems realistic.”

Germany is also planning new rules from October, requiring travelers arriving from risk zones to go into quarantine for at least five days before taking a test.

That would essentially rule out intra-Europe weekend city hops — something which had resumed over the summer months.

“The continuing high level of uncertainty in global air traffic makes short-term adjustments to the current market situation unavoidable for the foreseeable future,” said the group.

As part of its fleet reduction, the airline said it has been forced to put its eight remaining A380s as well as 10 A340-600s into deep storage.

Six A380s had already been taken out of service earlier this year.


China aims for sustained and healthy economic development

Updated 30 October 2020

China aims for sustained and healthy economic development

  • Beijing to let market forces play decisive role in resources allocation, report says

BEIJING: China is targeting sustained and healthy economic development in the five years to 2025, with an emphasis on a higher quality of growth, the Xinhua news agency said on Thursday, citing the ruling Communist Party’s Central Committee.

President Xi Jinping and members of the Central Committee, the largest of the ruling party’s elite decision-making bodies, met behind closed doors from Monday to lay out the 14th five-year plan, a blueprint for economic and social development.

China’s external environment “is getting more complicated,” the agency said, adding, “There is a significant increase in instabilities and uncertainties.”

BACKGROUND

China aims to boost its gross domestic product (GDP) per person to the level of moderately developed countries by 2035, while GDP is due to top 100 trillion yuan ($15 trillion) in 2020.

However, the country’s development was still in a period of important strategic opportunities, despite new challenges, it said.

It added that China aims to boost its gross domestic product (GDP) per person to the level of moderately developed countries by 2035, while GDP is due to top 100 trillion yuan ($15 trillion) in 2020.

China will also deepen reforms and let market forces play a decisive role in resources allocation, the agency said.

China will promote a “dual circulation” model, make self-sufficiency in technology a strategic pillar for development, move to develop and urbanize regions, and combine efforts to expand domestic demand with supply-side reforms, it added.

The “dual circulation” strategy, first proposed by Xi in May, envisages that China’s next phase of development will depend mainly on “domestic circulation” or an internal cycle of production, distribution and consumption, backed by domestic technological innovation.