Lufthansa Group has warned it will likely have to make additional job cuts in response to the ongoing Covid downturn, and further trim its fleet.
The group’s executive board has approved a third round of restructuring measures, which will result in further efforts to match staffing levels with demand.
It has significantly revised down the group’s capacity outlook; Lufthansa had previously anticipated achieving 50% of 2019 capacity by the fourth quarter.
However, the group’s executive board has now said this "no longer seems realistic", adding that if current trends continue, capacity by available seat kilometres will reduce to between 20% to 30% compared to 2019.
As a result, the group expects to cut around 150 aircraft from its group-wide fleet by 2025, which also includes wet-leased aircraft.
The group’s eight remaining Airbus A380s and 10 Airbus A340-600s will be removed from its fleet planning, and placed in long-term storage.
"These aircraft will only be reactivated in the event of an unexpectedly rapid market recovery," said Lufthansa.
It expects this decision to cost around €1.1 billion, which it expects to account for in its third quarter results.
With regards to personnel, the group earlier this year identified a jobs surplus equivalent to around 22,000 full-time roles; this, it said, "would increase" as a result of the third phase of the restructuring programme.
"The change in permanent staffing levels within flight operations will be further adjusted in regards to market development," said Lufthansa. "The compensation and reduction of personnel surplus will be discussed with the responsible employee representatives."
The group added the executive board was committed to agreeing crisis packages with unions to limit the number of necessary redundancies.
It also intends to cut costs by a further €100 million a month this winter (to an average €400 million a month), albeit while aiming to return to positive cash flows during 2021.
Some 20% of management positions will be cut during Q1 2021, while administrative office space will be reduced by 30% in Germany and reviewed worldwide.
"In the executive board’s assessment, the continuing high level of uncertainty in global air traffic makes short-term adjustments to the current market situation unavoidable for the foreseeable future," said the group in a statement.
"The board considers the expansion of coronavirus tests prior to departure an essential prerequisite for the resumption of global mobility.
"Consistent testing is possible, increases safety for travellers and is a better alternative than changing inconsistent entry and quarantine regulations."