Lufthansa to shrink in wake of record €6.7bn loss
Lufthansa is planning to ground more jets after the German flag-carrier reported a record €6.7bn (£5.8bn) loss in the wake of the collapse in air travel caused by coronavirus.
Europe's largest airline group is likely to emerge form the pandemic smaller, executives said, as they said older planes will be retired.
Announcing the dire annual results, chief executive Carsten Spohr said Lufthansa was “examining whether all aircraft older than 25 years will remain on the ground permanently”.
The company reported annual revenues of €13.6bn, down 63pc on the previous year.
To battle the impact of Covid, the airline is shedding a fifth of its staff, taking headcount down to 110,000, with a further 10,000 jobs or their equivalent in wages costs to go.
To ease the crisis, Lufthansa has received a €9bn loan backed by the German government.
The loss is slightly lower than the €6.7bn figure reported last month by rival Air France-KLM, which is seeking another another bailout from the French and Dutch governments.
Looking ahead, the carrier is expecting this year to operate at between 40pc and 50pc of its pre-crisis capacity.
However, if the vaccination programme drives a surge in summer bookings, Mr Spohr said the airline could restore 70pc of its flight schedule in the short term.
"We expect demand to pick up again as soon as restrictive travel limits are reduced by a further roll-out of tests and vaccines," he said.
“Internationally recognised, digital vaccination and test certificates must take the place of travel bans and quarantine.”
Shares in Lufthansa fell 1.7pc in Frankfurt on Thursday.
