The Strategist

Lufthansa to downsize up to 26,000 employees

06/12/2020 - 03:03

German aircraft company Deutsche Lufthansa plans to downsize up to 26,000 jobs due to a sharp decline in air traffic amid a pandemic.

Laurent ERRERA via flickr
Laurent ERRERA via flickr
The company is trying to negotiate with unions on ways to reduce staff costs before an extraordinary general meeting of shareholders, which will discuss a plan to save the group.

The carrier predicts a slow recovery in demand in the aviation industry and expects that after the crisis, it will have 100 less aircraft in operation, reports BBC News. In connection with this there will be an oversupply of jobs. About 22,000 full-time positions will be superfluous, and up to 26,000 employees may lose their jobs, said Lufthansa’s representative after meeting with unions.

Approximately half of job cuts will be in Germany. Lufthansa expects to coordinate these measures with unions by June 22, writes the BBC.

Lufthansa has over 138,000 employees. It was previously assumed that the concern would have to lay off about 10,000 people.

Since the beginning of 2020, the value of Lufthansa papers has fallen by 37%. Last week, it became known that Lufthansa shares will be removed from the index of the 30 largest companies in the Frankfurt Stock Exchange - DAX - from June 22, 2020. They will be included in the MDAX index, which includes 60 companies following the size of capitalization behind the DAX list.

In early June, the airline’s supervisory board voted to accept a € 9 billion financial assistance package from Germany’s state-owned Economic Stability Fund (WSF).

Paper airlines at auction on Thursday cheaper by 7.7%.