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Lufthansa is Losing €1 Million Every Hour… Day in, Day Out

Lufthansa is Losing €1 Million Every Hour… Day in, Day Out

In a video message to employees, the chief executive of German flag carrier Lufthansa painted a dire picture caused by the Coronavirus crisis – the airline group is currently losing €1 million of its liquidity every single hour. And the group, which also includes Austrian, Brussels Airlines and SWISS, as well low-cost subsidiary Eurowings doesn’t see an end in sight to the eye watering losses.

“In total, we therefore lose one million euros of our liquidity reserve every hour – day and night, week after week and probably also month after month,” Carsten Spohr said in the video message.

Describing the crisis as the “biggest challenge in our history,” Sphor echoed a message by British Airways chief executive Alex Cruz that the airline was in “a fight” for its very existence.

Spohr told staffers that Lufthansa was seeking a substantial bailout from the German government but urged the airline’s employees to get onboard with a massive cost-cutting programme that will include significant changes to terms and conditions.

Around 7,000 employees will be affected by a first tranche of cuts, which will include redundancies if employees don’t agree to working conditions and pay cuts. Lufthansa is also planning the closure of Germanwings, with the loss of 1,400 cabin crew jobs.

Lufthansa has been looking to close down Germanwings, an offshoot of Eurowings, for some time because it’s staff are on old style contracts which adds significant expense to what should be a low-cost operation. Previous attempts to close Germanwings down have been resisted by unions who are up in arms because they see Lufthansa using the COVID-19 pandemic as an excuse not to rid itself of expensive employees.

Sphor says “solidarity and flexibility are now required” by Lufthansa’s employees if they are to keep their jobs. The airline will seek to save as many jobs as possible he says, finding alternative roles throughout the business, which may include moving full-time employees into part-time positions.

Yesterday, the airline group warned that it could take years to fully recover from the current crisis. Even after travel restrictions have been lifted, Lufthansa doesn’t expect travel demand to recover for some time.

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