Lufthansa Freezes Hiring as Coronavirus Outbreak Squeezes Demand

(Bloomberg) --

Deutsche Lufthansa AG is adopting a package of cost-saving measures, including a hiring freeze, as the economic fallout of the coronavirus starts to bite. The shares fell to a six-month low.

While it cannot yet estimate the impact of the virus on earnings, Lufthansa is putting all hiring on hold and offering employees unpaid leave effective immediately, the German airline said Wednesday in a statement. It’s also looking at expanding part-time work options.

Global cases of the new coronavirus currently total 80,991, with China accounting for the bulk of those as well as most of the deaths. Concern is growing that the outbreak could develop into a pandemic. Parts of northern Italy -- the Lufthansa group’s second-biggest foreign market, after the U.S. -- are under a lockdown after an outbreak there.

Lufthansa and its Swiss and Austrian arms have already scrapped all flights serving mainland China until the end of March. It said it’s planning further cuts to Hong Kong after reducing capacity there. The measures translate into the equivalent of 13 idle aircraft.

Shares of Lufthansa fell as much as 3.6% to 12.93 euros, the lowest intraday price since Aug. 16, and were down 3.3% as of 10 a.m. in Frankfurt.

The carrier is also scrapping all flight attendant and station personnel training courses that were due to begin in April. In administrative areas, the core Lufthansa brand will reduce project volume by 10% and the budget for material costs by 20%, it said.

The group will present fourth-quarter earnings on March 19, when it will comment more on the outbreak, Lufthansa said.

To contact the reporter on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net

To contact the editors responsible for this story: Daniel Schaefer at dschaefer36@bloomberg.net, Tom Lavell, Christopher Jasper

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