Lufthansa seeks urgent deal with unions on 22,000 job cuts

German flag carrier Lufthansa said it was looking to reach a deal with unions by next week on how to cut 22,000 full time jobs in response to the impact of the coronavirus pandemic.

The company, which is set to receive a €9bn government bailout, said it wanted to reach agreement by June 22.

Flight operations would be hard hit, with an estimated 5,000 jobs to go, including 600 pilots, 2,600 flight attendants and 1,500 ground staff, Lufthansa said in a statement.

A further 1,400 jobs at headquarters and in administration at other group companies will also be affected. Lufthansa Technik has a worldwide surplus of about 4,500 jobs, 2,500 of them in Germany and in the LSG Group’s catering business 8,300 jobs were affected worldwide.

"According to our current assumptions about the course of business over the next three years, we have no perspective of employing one in seven pilots and one in six flight attendants as well as numerous ground staff at Lufthansa alone,” said labour director Michael Niggemann.

“This excess capacity could even increase if we do not find a way to get through the crisis with competitive personnel costs. We therefore want to reach the urgently needed crisis agreements with our collective bargaining partners quickly.”

“Our objective remains unchanged: We want to keep as many colleagues on board as possible throughout the crisis and avoid layoffs for operational reasons.”

"To achieve this, painful restructuring measures are unavoidable, which we want to implement in a socially responsible manner.”

Staff overcapacity could be partially compensated for by short-time working, collective agreements to reduce weekly working hours or other cost-cutting measures.

Airlines across the world have grounded the majority of their fleets as governments imposed lockdowns to stymie the spread of the virus that has so far killed 408,000 people globally. The resultant slump in demand has left them burning through cash reserves, even with state bailouts.

Lufthansa suffered a 98% slump in April passengers numbers, and a 26% year-on-year fall in the first quarter. It last week reported that first quarter net losses blew out to €2.1bn (£1.87bn) compared with losses of €342m a year earlier.

“Global air traffic has come to a virtual standstill in recent months. This has impacted our quarterly results to an unprecedented extent,” said chief executive Carsten Spohr last week.

The airline last month agreed to surrender landing slots at several of its German hubs in order to get approval for a €9bn bailout, which will see the German government take 20% stake in the airline with an option on a further 5% plus one share to block hostile takeovers.

That would make the federal government Lufthansa’s biggest shareholder. The group is to ask its shareholders to back the accord at an online meeting on June 25 plus approval from European competition authorities.