Lufthansa's management is tightening the grip on costs. Among other things, 1000 administrative positions will be eliminated - especially in management.
In the midst of the corona crisis, the Lufthansa Group Executive Board decided to reduce the fleet by 100 aircraft and to close down Germanwings. Now the management has initiated further cost-cutting measures. Among other things, they are intended to ensure that the Group will be able to repay the government aid granted in the coming years.
Lufthansa is in a hurry. They want to repay the government loans and deposits «as quickly as possible» in order to «avoid a further increase in interest charges», they say. Last weekend, Group CEO Carsten Spohr had declared that even then, however, the company would not be free of debt. «We want to take out loans on the market to repay the taxpayers’ money in Switzerland, Germany and Austria. We would rather be indebted on the capital market than with the taxpayers.»
20 percent fewer executives
The restructuring program is called Renew. It is scheduled to run until December 2023 and is managed by Detlef Kayser, member of the Management Board. Part of it involves job cuts. For example, the Executive Board has decided that the administration of Deutsche Lufthansa will shrink by 1000 positions.
Following the downsizing of the Executive Board of Deutsche Lufthansa, the management bodies of the subsidiaries will also be reduced in size. As a first step, the number of committee members at Lufthansa Cargo, LSG Group and Lufthansa Aviation Training was reduced by one position each. But the cuts won’t only be at the top: The number of managers across the Group is to shrink by 20 per cent.
22,000 full-time positions too many
Overall, there is still «an arithmetical personnel surplus of at least 22,000 full-time positions in the companies of the Lufthansa Group», it is said. The company wants to avoid layoffs, but has so far only successfully negotiated with the flight attendant’s union Ufo.
The Executive Board notes that Lufthansa alone has already phased out 22 aircraft ahead of schedule: six Airbus A380s, eleven Airbus A320s and five Boeing 747-400s. The financial planning up to 2023 also provides for the acceptance of a maximum of 80 new aircraft into the Lufthansa Group’s fleets. This cuts the investment volume in new aircraft in half compared to the previous plan.