Lufthansa says 30,000 jobs at risk over coronavirus pandemic

Germany’s Lufthansa said it would ground 125 more planes than planned in the winter. (AP)
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Updated 26 October 2020

Lufthansa says 30,000 jobs at risk over coronavirus pandemic

  • Letter to employees says that it is now ‘harder than ever’ to predict how the aviation industry will develop

FRANKFURT AM MAIN: Germany’s Lufthansa has warned that 30,000 jobs are under threat as it scaled down its winter schedule to levels not seen since the 1970s as demand for travel collapses because of the coronavirus pandemic.
The executive board of Europe’s largest airline said in a letter to employees that it was now “harder than ever” to predict how the aviation industry will develop, given there is little clarity over how long travel warnings would be applied or how quickly any recovery could come.
The use of video conferences may have also changed attitudes to travel against the backdrop of environmental prerogatives, while pressures on income could also weigh on tourism, the board wrote in the letter seen by AFP.
“No one can reliably predict these effects. We are determined nevertheless to preserve at least 100,000 of the Lufthansa Group’s 130,000 current jobs. Even if we do not currently have nearly enough jobs for a workforce of this size,” it added.
Lufthansa in September said more jobs would go beyond the 22,000 previously announced but did not give a clear figure then.
The German state in June stepped in to take a 25 percent stake in the airline, pumping nine billion euros of liquidity to prop up one of the nation’s most internationally visible companies.
The carrier – including its subsidiaries Swiss, Austrian, Brussels Airlines and Eurowings — said it would ground 125 more planes than planned in the winter, offering a maximum of a quarter of 2019’s capacity as it anticipates “less than a fifth” of the previous year’s passengers.
The season would be an “immense challenge,” it said.
“After a summer that gave us all reason for hope, we are now once again in a situation that is tantamount to a lockdown in effect.”
As the travel industry adapts to a post-pandemic world, the airline’s board said “we will be a smaller but also a more efficient Lufthansa. The road there will be long and arduous.”
The German flag carrier has succeeded in cutting its outflow of funds at the start of the pandemic from one million euros ($1.2 million) per hour to “only” one million euros every two hours, it said.
It will reduce administrative functions to around 30 percent, and shutter most of its main office in Frankfurt. Eurowings will entirely give up its office space in Dusseldorf.
The company will also keep employees on shorter work hours for a longer time — up to the end of February from mid-December previously.
Lufthansa reported an operating loss of 1.3 billion euros in preliminary third-quarter figures but the three months to the end of 2020 are looking far gloomier.


Japan’s capital sees prices fall most in over 8 years as COVID-19 pain persists

Updated 27 November 2020

Japan’s capital sees prices fall most in over 8 years as COVID-19 pain persists

  • Tokyo core CPI marks biggest annual drop since May 2012
  • Data suggests nationwide consumer prices to stay weak

TOKYO: Core consumer prices in Tokyo suffered their biggest annual drop in more than eight years, data showed on Friday, an indication the hit to consumption from the coronavirus crisis continued to heap deflationary pressure on the economy.
The data, which is considered a leading indicator of nationwide price trends, reinforces market expectations that inflation will remain distant from the Bank of Japan’s 2% target for the foreseeable future.
“Consumer prices will continue to hover on a weak note as any economic recovery will be moderate,” said Dai-ichi Life Research Institute, which expects nationwide core consumer prices to fall 0.5% in the fiscal year ending March 2021.
The core consumer price index (CPI) for Japan’s capital, which includes oil products but excludes fresh food prices, fell 0.7% in November from a year earlier, government data showed, matching a median market forecast.
It followed a 0.5% drop in October and marked the biggest annual drop since May 2012, underscoring the challenge policymakers face in battling headwinds to growth from COVID-19.
The slump in fuel costs and the impact of a government campaign offering discounts to domestic travel weighed on Tokyo consumer prices, the data showed.
Japan’s economy expanded in July-September from a record post-war slump in the second quarter, when lockdown measures to prevent the spread of the virus cooled consumption and paralyzed business activity.
Analysts, however, expect any recovery to be modest with a resurgence in global and domestic infections clouding the outlook, keeping pressure on policymakers to maintain or even ramp up stimulus.