Lufthansa Airlines is slashing nearly a quarter of its management roles including a thousand administrative positions under a retrenchment program the carrier disclosed Tuesday as part of initiatives to deal with the ill effects of the pandemic.
Lufthansa Group, which employs approximately 138,000 employees, announced it would also trim its investment in new commercial planes by around 50 percent, even though it stated it may add up to 80 new aircraft by 2023.
The company's stakeholders last month concurred on a €9 billion ($10.2 billion) government stimulus to protect the future of Germany's flagship airline after the travel crisis triggered by the coronavirus brought the group to the edge of collapse.
Lufthansa added it wanted to cut federal loans and equity shares as soon as possible to avoid a spike in interest charges, as higher rates would increase the company's financial load and demand more cost-cutting measures.
After reducing the executive ranks of the Lufthansa mother unit, the carrier is now also considering similar measures at its affiliates, with Lufthansa Cargo AG, Lufthansa Aviation Training, and LSG Group poised to lose one board job role each.
In a statement, the company disclosed it has already scrapped 22 planes, including six Airbus A380s, 11 Airbus A320s and five Boeing 747-400s. The financial restructuring will be carried out up to 2023 and limits the carriers' fleet from accepting not more than 80 new planes.
The airline, which includes Swiss International, Austrian Airlines and Brussels Airlines, is reportedly shedding around 1 million euros in cash reserves every hour as a result of the massive drop in air travel demand.
Lufthansa also stated that it had employees in 22,000 full-time positions that it no longer needed but would try to avoid forcing staff to lose their jobs.
The German carrier said it was trying to reach a deal with trade unions on termination plans, but had only succeeded so far with the UFO Union representing German cabin personnel. The company divulged that it was still in discussions with unions representing pilots and ground workers.
Furthermore, the group said it intends to fast-track longstanding plans to make its core business a separate corporate entity, a representative disclosed.
In April, Lufthansa unveiled the first set of cost-cutting measures, including fleet downsizing and the halt of Germanwings flight operations. Last month, the group reportedly warned that around 26,000 job positions may be cut in the wake of the ongoing crisis.
