Lufthansa announced it will have to make more staff cuts and pull more jumbo jets than originally planned because the outlook for air travel is worse than the company anticipated.
Lufthansa disclosed Sept 21 it would retire 50 more aircraft than previously announced in a decision to retire 150 aircraft by the middle of the decade. It will also pull its remaining eight Airbus A380 jets from service, and they will only be reactivated in the event of an “unexpectedly rapid market recovery”.
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| A Lufthansa A380 takes off from Frankfurt. (Image Credit Mr. Worker on Pixabay) |
Lufthansa had previously put all its 14 A380s fleet in storage in response to the Covid-19 pandemic and accelerated a retirement plan by withdrawing six of them immediately.
The company said the modest rebound in airline travel dropped after the end of the summer vacation season and this has led it to make these difficult decisions. It expects to offer only 20-30 percent of its normal capacity in the last three months of the year, compared with the same period in 2019.
Lufthansa joins a number of airlines grounding their larger aircraft fleets while using smaller long-baul twinjets. Sticking with this industry trend, the airline intends to keep its Boeing 747-8s in service while its Airbus A380s are mothballed for the time being.
Speaking during the World Aviation Festival on Sept. 25, Lufthansa Group chief exectuve Carsten Spohr said the airline is also phasing-out its 747-400s, moving the timeframe forward to 2025 from 2030.
Even after already receiving a 9 billion euro ($10.6 billion USD) bailout from the German government, the German airline said Sept. 21 it was grounding 10 four-engine A340-600 aircraft and it would have to lay off more than the previously announced 22,000 full-time positions, but it didn't say when or how many more.
The final number of job reductions will be negotiated with employee representatives. The airline said it was hoping to reduce spending from its current 500 million euros a month to 400 million euros ($470 million USD) a month this winter.
Looking to the future, Spohr said the Boeing 747-8s will remain in service as the airline's "flagship ... after the crisis" as "the most efficient aircraft" in Lufthansa's fleet.
Even prior to the pandemic, Spohr said that the A380 – configured by Lufthansa for 509 passengers – was more of a challenge to operate profitably than the 364-seat 747-8 outside peak season. Having joined Lufthansa's fleet in 2012, these aircraft are relatively new and their belly-freight capacity is a lot higher than the A380.
For these reasons, Lufthansa opted to ground and the A380 earlier than anticipated over the 747-8s. According to Cirium fleets data, Lufthansa has 19 747-8s, 11 of which are listed as being in storage.
Management is sticking with its prediction that the company will return to positive operating cash flow some time in 2021.
To learn more about airline trends during the pandemic, follow Airframe Structural.
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