Lufthansa: Further group-wide cost cuts 'inevitable'

Last month, the group’s shareholders gave a €9 billion German government bailout, as well as commitments from the governments of Austria and Switzerland, their final approval after the proposal was green lit by the EU.

"The group’s financing is currently secure," said Lufthansa in a statement. "However, the complete repayment of government loans and investments, including interest payments, will place an additional burden on the company in the coming years, making sustainable cost reductions inevitable."

Lufthansa’s ReNew programme will be headed up by Detlef Kayser, the group’s executive board member responsible for airline resources and operations standard, and will run until December 2023. ReNew also bundles existing restructuring programmes already under way across the group.

ReNew will involve:

• Reducing the size of the executive boards across the group’s subsidiaries
• Repaying government loans and equity participations "as quickly as possible" to avoid interest payments
• Cutting leadership positions across the group by 20%
• Cutting 1,000 admin positions
• Speeding up efforts to restructure the Lufthansa airline as a separate corporate entity
• Reducing sub-fleets and bumbling flight operations; efforts at Frankfurt and Munich have already seen 22 Lufthansa aircraft phased out ahead of schedule
• Maximum of 80 new aircraft to join group-wide fleet through 2023, cutting aircraft investment in half
• Efforts to reduce calculated "personnel surplus of at least 22,000 full-time positions" within the group