Lufthansa to Emerge from Pandemic In Stronger Position, Smaller Operations

Published May 5th, 2021 - 10:00 GMT
Lufthansa to Emerge from Pandemic In Stronger Position, Smaller Operations
Lufthansa sales plummeted 63 per cent, to 13.6 billion euros (16.4 billion dollars), in 2020 due to the collapse in air traffic after the pandemic engulfed the global economy. (Shutterstock)
Highlights
A total of 115 jets have already been retired so far, while the airline announced on Monday the purchase of 10 new long-haul jets.

German carrier Lufthansa attempted to reassure its shareholders on Tuesday that the airline could soon overcome the pandemic that has plunged the aviation industry into a deep crisis, the Deutsche Presse Agentur (DPA) reported.

Lufthansa chief executive Carsten Spohr told shareholders at the annual general meeting in Frankfurt that the group would emerge from the crisis in a stronger position, but as a smaller operation.

"We will not only master this crisis, but use it as an opportunity to further strengthen our global position in the industry," Spohr said.

"In the future, the Lufthansa group will initially be smaller - but also more focused, digital, efficient and sustainable," he said.

Spohr told the meeting that this would include the group focusing on more modern aircraft with lower fuel consumption.

A total of 115 jets have already been retired so far, while the airline announced on Monday the purchase of 10 new long-haul jets.

Lufthansa sales plummeted 63 per cent, to 13.6 billion euros (16.4 billion dollars), in 2020 due to the collapse in air traffic after the pandemic engulfed the global economy.

As a result, the airline posted a record loss of 6.7 billion euros last year, along with massive cuts in jobs.

By the end of the first quarter of 2021, about 30,000 of what was once the airline's 140,000-strong workforce had departed the group.

Lufthansa's catering business in Europe was sold, and its low-cost offshoot German wings and holiday airline SunExpress Deutschland had been shut down.

Last week, Lufthansa said it planned to cut a further 10,000 full-time jobs in Germany alone.

But Lufthansa board chairman Karl-Ludwig Kley pointed to the rapid progress in the rollout of vaccinations, renewed access to capital market financing and the motivation of employees for a new start as further grounds for optimism.

At the meeting, Spohr asked shareholders to approve raising up to 5.5 billion Euros in new equity after the federal government provided 9 billion Euros in support shortly after the crisis hit early last year. "If we have a choice, we'd rather finance ourselves from the capital market than from the taxpayer," said Spohr.


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