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Published 21:33 IST, August 6th 2020

Lufthansa announce compulsory lay-offs, normal air travel projected to resume after 2024

Lufthansa has informed its German employees of upcoming compulsory lay-off on August 6 due to loss of billions in a single quarter and failed negotiations.

Reported by: Shubham Bose
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Lufthansa has informed its German employees of upcoming compulsory lay-off on August 6. According to reports, the airline stated that the lay-offs were something that could not be avoided due to negotiations with the worker’s union that were progressing slowly and the loss of $2 billion in a single quarter due to the coronavirus pandemic.

Drastic dip in air traffic

As per reports, due to the COVID-19 pandemic and the restrictions put on travel by governments across the world, Lufthansa was only able to fly 4 per cent of the passengers between April-June 2020 that the number of passengers it flew during the same time last year. Lufthansa believes that air travel will only resume by 50 per cent of its normal level by the end of 2020 and only two-thirds of its pre-pandemic traffic by 2021.

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The airline received a 9-billion-euro state bailout in June but recovery is still a long way off because European recovery has unfortunately been undermined by several new localized clusters of coronavirus cases forcing states to implement restrictions again. As per reports, Lufthansa Chief Executive Carsten Spohr has stated that he does not expect normal levels of air travel seen before the onset of the pandemic will resume before 2024 and the company has also revealed that it has run out of patience in long dragged out talks with unions.

According to reports, the airline plans to spend 400-500 million euros each month for the rest of 2020 and expects to return to a positive free flow of cash by 2021. The announcement of compulsory lay-off for the airline's German employees comes on the heels of the company announcing that it plans to cut 20 per cent of its leadership positions as well as 1,000 administrative positions. As per Lufthansa’s statements, it plans to reduce 22,000 full-time jobs.

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Updated 21:34 IST, August 6th 2020

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