Economy & Politics

Loss of billions is a heavy burden on the German airline

Lufthansa is in a serious crisis due to the corona pandemic. Photo: dpa / Soeren Stache

The corona lull continues to weigh heavily on Lufthansa. However, airline boss Spohr sees some glimmers of hope in the likely harsh winter.

Frankfurt / Main – Lufthansa is flying into the hard Corona winter with the ballast of another billion-dollar loss. Write-downs on jets and kerosene contracts that are no longer required have increased the loss for the third quarter to just under 2 billion euros, as the group reported in Frankfurt on Thursday.

After nine months, the bottom line is now a minus of 5.6 billion euros with sales of 11 billion euros. A year earlier, sales after three quarters had amounted to 27.5 billion euros, which was enough for a positive group result of a good 1 billion euros.

Hope in Frankfurt

In the current final quarter, Lufthansa flight operations will remain limited to a maximum of a quarter of capacity due to the corona pandemic, the company announced. However, Lufthansa expects advantages from its hub system, which is mainly established in Frankfurt, as many point-to-point connections in Europe no longer pay off.

In addition, due to the high demand for freight, the company wants to use more converted passenger jets again and benefit from the distribution of anti-corona vaccines. In the temperature-controlled transport of medicines, Lufthansa Cargo and the subsidiary Swiss are world leaders, said CEO Carsten Spohr when presenting the interim results in Frankfurt.

The operational outflow of cash is accelerating again and should be limited to a maximum of 350 million euros per month. In the meantime, due to the vacation wave, it was only 200 million euros a month in the summer – after 500 million euros at the beginning of the crisis. The management does not dare to turn back into the positive until the coming year, provided that half of the pre-crisis supply is successfully brought to the market. Then the repayment of the state loans should also begin.

“We are at the beginning of a winter that will be tough and challenging for our industry,” said Spohr. The group would have cash and cash equivalents of 10.1 billion euros. 6.3 billion euros of this comes from the joint state aid of over 9 billion euros from Germany, Austria, Switzerland and Belgium.

Read here: airport opens – but the problems remain

Despite halting negotiations with the German trade unions, Lufthansa has made further progress in downsizing. At the end of September, the group still had a good 124,500 employees, almost 14,000 fewer than a year earlier, saving around 900 million euros in personnel costs a year. The reduction was most severe with 10,500 employees at the catering subsidiary LSG Sky Chefs, which is up for sale.

Spohr confirmed the goal of keeping around 100,000 jobs in the group. Lufthansa currently employs a good 124,000 people. While the Belgian subsidiary Brussels Airlines agreed to cut every fifth job, negotiations with the unions in Germany are stalling. The social plan negotiations for the dismissal of 2,800 ground employees and 1,100 pilots were initiated at the Lufthansa core company. Spohr does not expect this until the middle of next year at the earliest. But he hoped for agreements with the unions beforehand.

Current reports, background information worth knowing and useful tips – in our dossier we bundle all articles on Corona.

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