MIAMI – Last month, Lufthansa (LH) was granted a €9bn state aid. After conflicts with the shareholders, on June 25 it was announced that the deal was secured with 98% of shareholders voting for it. The aid gives the airline group liquidity.
Despite the fact that the airline group is now constantly expanding, the first restructuring package was in April which reduced the fleet by 100 aircraft, ended wet-lease agreements, and included the suspension of Germanwings.
The Executive Board this week announced the second set of changes which they named “ReNew” program. It is scheduled to run until December 2023 and is led by Dr. Detlef Kayser, Member of the Lufthansa Group Executive Board. The already started restructuring programs will continue unchanged.
In detail, the following resolutions were adopted by the Group Executive Board:
- The Executive Board will be downsized and the number of managerial positions will be reduced. In a first step, the number of board members was reduced by one position each at Lufthansa Cargo AG, LSG Group, and Lufthansa Aviation Training.
- Government loans and equity participation are to be reduced as quickly as possible to avoid a further increase in interest charges.
- The number of leadership positions throughout the Group will be reduced by 20%.
- 1,000 administrator positions will be cut.
- The process of transforming Lufthansa Airline into a separate corporate entity is being accelerated.
- The fleet reduction will further continue.
- The financial planning up to 2023 provides for the acceptance of a maximum of 80 new aircraft into the Lufthansa Group carriers’ fleets. This will reduce the investment volume for new aircraft by half.
Due to the long-term effects of the coronavirus pandemic, which are particularly serious for air travel, there is a calculated personnel surplus of at least 22,000 full-time positions in the companies of Lufthansa Group even in the period following the crisis.
Lufthansa Group says that it will continue to avoid layoffs wherever possible. This requires agreements on crisis-related measures with unions. They said that negotiations have only been successful with the UFO cabin union.