Lufthansa, Pilots Conclude Deal On Cost Savings By Euro 450 Million

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Lufthansa - aviatorsbuzz

Lufthansa and its pilots have reached an agreement that secures jobs until end-March 2022 and could help reduce costs by as much as 450 million euros ($548 million), pilots’ union Vereinigung Cockpit (VC) said on Wednesday.

Grounded Lufthansa Fleet

Like its rivals, Lufthansa is struggling to deal with global travel restrictions and grounded fleets in the wake of the coronavirus pandemic.

It is surviving on 9 billion euros of state aid, and Chief Executive Carsten Spohr had said earlier this month that the airline would have to lay off 1,000 pilots in the second quarter if it cannot seal a wage agreement with unions.

The agreement includes an extension of shortened working hours in 2021 under the government’s Kurzarbeit scheme as well as a reduction in working hours with corresponding salary cuts and the suspension of collective pay increases, Germany’s flagship carrier said in a separate statement.

Pilot Layoffs

“Lufthansa is ruling out layoffs of pilots for operational reasons at Lufthansa, Lufthansa Cargo, Lufthansa Aviation Training and a subgroup of Germanwings pilots until March 2022,” the airline said.

Markus Wahl, president of the VC union, which represents Lufthansa’s roughly 5,000 pilots, said: “We are relieved that… we have succeeded in protecting the cockpit staff against compulsory layoffs at least until 31 March 2022.”

Lufthansa has an option to extended the agreement until the end of June 2022, according to the union.

Lufthansa - aircraft - Aviatorsbuzz
A representational picture of a Lufthansa aircraft. Source: Instagram

Simplyflying.com reported despite its pedigree in the industry, Lufthansa and its partner airlines have not been immune from the challenges faced by commercial aviation this year. The industry-wide economic downturn caused by COVID-19 has forced the German flag carrier to make cuts to both its fleet and its staff.

Lufthansa Fleet

In terms of the airline’s fleet, it is unlikely to return its remaining A380 aircraft to service. Lufthansa’s management announced this after the publication of its third-quarter results. It has also been forced to store a number of its Boeing 747-8 aircraft. These are presently sitting on Frankfurt International’s inactive north-western runway 07L/25R. This has been closed since December 14.

From a human resources perspective, Lufthansa’s Q3 results showed a surplus of approximately 1,100 pilots. At this time, it had already cut 14,000 jobs since the start of the year. This resulted in savings of around €900 million ($1.1 billion), but it appears that further cuts are on their way.

Meanwhile, Lufthansa is flying in 80 tonnes of fruit and vegetables to help restock UK supermarket shelves amid fears that the lifting of a French blockade will not prevent some shortages in stores.

The Guardian.com said that the German airline was carrying a cargo of lettuce, cauliflower, broccoli, strawberries and citrus fruits, and considering whether to put on additional special cargo flights to meet demand.

It said a B777 freighter aircraft would arrive at Doncaster Sheffield airport at lunchtime on Wednesday. The flight comes as supermarkets and their suppliers scramble to find alternative ways to stock shelves as thousands of lorries and vans remain stuck outside Dover.

Due to the ongoing novel coronavirus pandemic, Lufthansa has been hard hit by the collapse in travel like most other airlines. This has led to the German government imposing a 10-day quarantine on citizens returning from countries with high Covid-19 infection rates.

However, Lufthansa, in a recent statement, said that it saw up to 400% more bookings in the last week of November compared to the previous week, with destinations like South Africa, Namibia, the Canary Islands, Madeira, and northern Finland proving popular.

The airline said it was responding by adding more flights, including to the Canary Islands from Frankfurt and Munich, as well as resuming flights to Seville and Palermo. Lufthansa also started rapid pre-flight Covid-19 antigen tests in Germany, which passengers needed to pass in order to fly.