The deep slump in demand for air travel because of the novel coronavirus pandemic globally has forced German airline Lufthansa to say that it will be slashing 22,000 jobs.
While expecting the very slow recovery in demand for air travel, the German anticipates that it will be left with about 100 fewer aircraft after the current bout of the pandemic is over.
About half of the redundancies will take place in Germany, Lufthansa said. The company hopes that it will come to an agreement about the job cuts with the unions by 22 June. However the company also hopes that short-time working and crisis agreements will also help it to reduce redundancies.
“The aim is to pave the way for the preservation of as many jobs as possible in the Lufthansa Group,” the company said.
More than 135,000 people are currently employed by the airline and about 50 per cent of them are in Germany.
“Without a significant reduction in personnel costs during the crisis, we will miss the opportunity of a better restart from the crisis and risk that the Lufthansa Group will emerge from the crisis significantly weakened,” said Lufthansa labour director Michael Niggemann.
A rescue package for Lufthansa worth €9bn from eh German government was agreed upon last month. Under the rescue package, a 20 per cent stake I the airlines will be taken up by the German government which the government plans to sell off by the end of 2023.
However the deal has to pass through the approval process of both the shareholders of Lufthansa as well as the European Commission.
In April, its budget airline Germanwings was closed down by the company.
There are a number of other major global airlines that are resorting to implementation of similar cost cutting measures as they anticipate a revival of the airline industry and air traffic demand to be long and slow and it will take some time to air travel demand to return to pre crisis levels.
For example, a proposal to make 12,000 of its 45,000 staff redundant is being proposed by British Airways which includes jobs of more than 1,000 pilot at risk. More than 3,000 people are to be laid off by Ryanair – which will correspond to about 15 per cent of the airlines total workforce. The chief of the airline Michael O’Leary said that the planned cuts are “the minimum that we need just to survive the next 12 months”
And while EasyJet has announced plans to cut up to 30 per cent of its workforce which will about 4,500 jobs, 3000 jobs out of a total of 10,000 people employed by Virgin Atlantic are to be made redundant.
(Adapted from BBC.com)