Winter ‘will be hard and challenging’ for airlines, Lufthansa CEO warns
Thursday, 05 November 2020
The Lufthansa Group suffered a net loss of €2 billion in its third quarter and is expecting a difficult winter due to the rebound of the Covid-19 pandemic, the Group said on Thursday.
Lufthansa was saved from bankruptcy by the German state with a €9 billion rescue plan this summer and its subsidiary Brussels Airlines received aid from the Belgian state after approximately three months of negotiations, with then-finance minister Alexander De Croo blaming the lack of a deal on Lufthansa.
After having limited its operating cash drain to €200 million per month, the number is expected to rise to €350 million at the end of the year, due to the second wave of infections, Lufthansa said in a press release.
“In the upcoming winter months, demand for air travel is expected to remain low due to the global increase of infection rates and the associated travel restrictions,” Lufthansa explained.
“The airlines of the Lufthansa Group will therefore be adjusting their original planning and will offer a maximum of 25 percent of last year’s capacity from October to December,” it announced, explaining that this reduction “will ensure that flight operations continue to make a positive contribution to earnings.”
To return to positive cash flow, the Group is also “advancing restructuring programs throughout the Group with the aim to make the Lufthansa Group sustainably more efficient in all areas,” said Carsten Spohr, the company’s CEO. Up to 30,000 jobs are at stake, according to Belga News Agency.
“We are now at the beginning of a winter that will be hard and challenging for our industry,” Spohr said. “We are determined to use the inevitable restructuring to further expand our relative competitive advantage,” he continued.
Spohr added that Lufthansa wants to “remain the leading European airline group following the end of the crisis.”