Yahoo Finance Lufthansa to cut 29,000 staff by the end of the year
German airline Lufthansa (LHA.DE) is expected to cut around 29,000 jobs by the end of the year, with another 10,000 in its home country next year, as it battles the turbulence caused by the coronavirus pandemic, it has been reported.
The Bild am Sonntag newspaper revealed, citing unnamed company sources, that Lufthansa would axe 20,000 jobs outside Germany as well as offloading its catering unit LSG, which employs 7,500 people.
The company and its subsidiaries, Eurowings, Swiss, Austrian and Brussels Airlines, have already cut flight schedules, the number of aircraft in its fleet and staff this year. It forecasted that air travel will not return to pre-pandemic levels before 2025.
In September it announced that it would reduce its fleet size by 150 aircraft, out of a total of 760. It also retired its remaining eight Airbus 380s, after it took six of them out of service in spring.
Ten A340-600 airplanes were also put into storage. Lufthansa previously said “these aircraft will only be reactivated in the event of an unexpectedly rapid market recovery.” It added that the remaining seven Airbus A340-600s will be permanently decommissioned.
Shrinking its aircraft fleet resulted in write-downs of €1.1bn (£1bn, $1.3bn).
READ MORE: Aircraft orders slump as travel industry struggles continue
The Frankfurt-based company also revealed that it was facing a major cash loss in its third quarter report last month. It reported a loss of €1.3bn in adjusted earnings before interest and taxes (EBIT), compared to a profit of €1.3bn in the same period a year ago, highlighting that the global coronavirus pandemic continued to have a “considerable impact” on its earnings.
This was largely due to customer reimbursements of ticket costs for coronavirus-related flight cancellations, which amounted to €2bn.
Carsten Spohr, chief executive, said in a statement at the time: “Strict cost savings and the expansion of our flight program enabled us to significantly reduce the operating cash drain in the third quarter, compared to the previous quarter.”
He also said last month that the carrier had 27,000 too many full-time equivalent staff members.
A formal announcement is expected on Monday.
Watch: What is inflation and why is it important?
