Lufthansa vows deep changes as losses riseEuropost
After posting a first-quarter net loss of €2.1bn, Lufthansa vowed to step up up restructuring measures, news wires reported. “In view of the very slow recovery in demand, we must now take far-reaching restructuring measures,” CEO Carsten Spohr said, adding the group was in talks with labour representatives over cutbacks.
The announcement comes days after Lufthansa agreed a state bail-out to tackle the coronavirus pandemic.The first quarter loss, which compares to a net loss of €342m in the year-earlier period, was driven by write-downs of €266m on its fleet, as well as write-downs on the book value of catering business LSG North America by €100m and on budget unit Eurowings by €57m, the carrier said on Wednesday. A slump in fuel hedging contracts was another €950m burden on the bottom line.
Lufthansa, which had grounded almost all its aircraft at the height of the pandemic, confirmed a loss before interest and tax of €1.2bn during the first three months of the year, first reported in April. The group’s non-executive board on Monday approved a €9bn government bailout that will force it to cede some of its prized landing slots to rivals.
Lufthansa Group, which includes Swiss, Austrian Airlines and Brussels Airlines, suffered a 98% slump in April passenger numbers from the year-earlier month to 241,000. But it laid out plans on Wednesday to increase the offered capacity in September to reach 40% of what it had scheduled before the crisis. Analysts expect the national carrier to be removed from Germany’s benchmark blue-chip index DAX of which Lufthansa has been a constituent since the gauge’s inception in 1988.