Lufthansa Says 22,000 Jobs Could Go in Costs Purge

(Bloomberg) -- Deutsche Lufthansa AG revealed the full extent of potential job losses, saying cost cuts and moves to shrink the fleet will leave it with a surplus of 22,000 full-time positions.

Europe’s biggest airline has begun talks with unions representing pilots, flight attendants and ground staff and aims to minimize the number of people dismissed by reducing working hours and other measures, it said in a statement. An agreement should be reached by June 22.

“Without a significant reduction in personnel costs during the crisis we will miss the chance of a better restart and risk Lufthansa Group emerging significantly weaker,” Michael Niggemann, the company’s director for human resources, legal and labor said in the release.

Lufthansa Chief Executive Officer Carsten Spohr said last week that he was working on plans to slash expenses and sell assets in order to adjust to a shrunken travel market and repay a 9 billion-euro ($10 billion) bailout from the German government. The carrier may also face a fare war with European discounters led by Ryanair Holdings Plc and years of sluggish demand on usually money-spinning long-haul routes.

Lufthansa said the job cuts will reflect plans to shrink the fleet by 100 aircraft, a measure Spohr had said previously could double losses from the 10,000 originally mooted.

The group also needs to trim excess white-collar posts and slim down its service business that caters to third-party customers. About half the jobs to go will be in Germany. Lufthansa also has airline operations in Switzerland, Austria and Belgium.

The UFO flight-attendant union said separately the jobs overhang affects 26,000 employees and appealed for a partnership approach avoiding direct dismissals, something it claimed had been absent in labor clashes prior to the Covid-19 outbreak.

The union said it will seek to reach agreement in time for a June 25 shareholder meeting due to vote on Lufthansa’s bailout -- a package it said is vital to avoiding bankruptcy.

©2020 Bloomberg L.P.

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