In the Corona doldrums, Lufthansa repaid German state aid and underwent a fitness regimen. But when restarting, additional problems could quickly arise.
It should really start by Easter at the latest. Like other airlines, Lufthansa is preparing for an onslaught of passengers and wants to finally put the Corona doldrums behind it.
When CEO Carsten Spohr presents the balance sheet for 2021 on March 3, he will emphasize the business opportunities of the restart. Europe’s aviation group with the highest turnover sees itself fit enough to have a say in the redistribution of the European sky, despite the sharp increase in debt.
Almost every day, leading Lufthansa managers report sharply rising booking numbers, but the crane is currently holding back noticeably. According to current Eurocontrol figures, the core company is completing just under half of the flights compared to 2019, while the range of low-cost airline Ryanair is already slightly above the pre-crisis level. At the beginning of the year, the Omikron variant once again left its mark on the flight plan.
New challenges
The Ukraine conflict is also causing new uncertainties. Should Russian airspace also be closed to overflights in the course of this, Lufthansa, with its strong focus on Asia, is threatened with high additional costs for the detours to China, Japan and Korea.
However, within Europe and to the west, the group expects demand to skyrocket, primarily from tourists. After Mallorca, the company wants to use a Boeing jumbo again, like last summer, in order to be able to fulfill all ticket requests. The group has prematurely stopped its corona shrinkage treatment and now wants to do without layoffs for the pilots as well. Instead of the planned 100,000 employees, almost 107,000 Lufthansa employees can now stay on board from the original 140,000.
The Lufthansa Group employs around 11,000 pilots, around 5,000 of them with the core brand. Laying off up to 1,100 of these particularly well-paid permanent employees has long been out of the question for Spohr. A conclave lasting several days began last Tuesday with the Vereinigung Cockpit union (VC) on future conditions. Lufthansa is demanding considerable savings, because there are still several hundred jobs to be cut through severance payments or joint part-time work.
In the past, the VC pilots had set a limit of 325 jets that they were only allowed to fly. According to the management, this no longer fits with the reduced total size, which according to unconfirmed reports including the sister companies Swiss, Austrian, Eurowings and Brussels Airlines should be 720 jets. The corresponding agreement was terminated last year.
Above all, the youngest company Eurowings Discover, which still does not have a tariff, is not trusted by the VC pilots, as it is supposed to serve medium- and long-haul tourist connections from the Frankfurt and Munich hubs. There was also talk of a “Lufthansa Light” below the core brand. From the pilots’ point of view, there is a threat of cheaper competition in the core of the core company, which customers no longer recognize, and which would also be fully integrated into Lufthansa’s booking and transfer systems. New crews are constantly being sought for Eurowings and Eurowings Discover.
European market
Lufthansa’s external competition in Europe continues to come from the low-cost airlines, although Ryanair withdrew from expensive Frankfurt at the end of March. The German holiday airline Condor, on the other hand, remains in business with a new investor and can be confident that Lufthansa will continue to have to take on fully booked feeder flights for Condor passengers. Although the Federal Cartel Office has not yet made a final decision, it has made it unmistakably clear that Lufthansa, which dominates the market on short and medium-haul routes, must not unilaterally terminate this long-standing service.
Lufthansa is aiming for another stake in southern Europe, where the Italian state wants to link the spruced up Alitalia successor ITA to an investor without giving up control entirely. Together with the Italian-born MSC shipping company Gianluigi Aponte, who wants to take over the majority, Lufthansa is taking part in the recently started bidding process. Similar to Swiss, Lufthansa would join an airline that has already undergone extensive restructuring, but would initially keep the risk with the ship and logistics partner small.
The prerequisite for this is the repayment of state aid, for which a framework of nine billion euros was available. Lufthansa fully repaid the German direct aid in November last year. The state economic stabilization fund must sell its remaining Lufthansa share package by October 2023.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
