Thursday, 07 May 2020
Lufthansa CEO Carsten Spohr is expected in Brussels one day soon to meet with prime minister Sophie Wilmès for talks on the subject of Belgian government aid for Brussels Airlines, which is owned by Lufthansa.
The airline grounded the majority of its planes in March, and because of the lack of business, the money is running out. The company expects its reserves to be used up by the end of this month.
Therefore it has asked the government for €290 million to help see it through the crisis.
Wilmès, in an exchange of letters with Spohr, has made it clear she expects hard guarantees from Lufthansa on how the money, if any is forthcoming, will be used. Those include a commitment to invest in Brussels Airlines, to ring-fence the Belgian aid for the Belgian arm of the group, and to invest in the growth of Brussels Airport.
The negotiations, however, are in danger of collapsing over the question of jobs.
Before stepping down as co-president of the airline, Etienne Davignon predicted that Brussels Airlines would have to reduce its activities by 25% to 30% to survive. And just this week, Spohr himself told a meeting of shareholders that Brussels Airlines would need to make cuts in its fleet.
Elsewhere, the CEO has been quoted as saying the restructuring programme called Reboot would have to be speeded up. That plan involves €160 million in cost-cutting. There is also talk of a social plan of €50 to €100 million. And the words “social plan” translate as “collective redundancies”.
Brussels Airlines employs 4,000 people directly, and its activities support many thousands more indirectly. How many would be affected if job losses are on the agenda is not known. But the threat to jobs is likely to affect Wilmès willingness to hand over money to Lufthansa.
In the meantime, the airline has postponed its planned restart until June 1, and the majority of staff are on temporary unemployment – in other words, are currently being paid by the Belgian state.
That is a problem for cabin crew. Temporary unemployment benefits are calculated based on the applicant’s basic salary, which for cabin crew is relatively low compared to what they take home each month, thanks to night work, unsocial hours, as well as a number of tax-free benefits. Those extras are not figured in the unemployment benefits.
The Brussels Times