Lufthansa CEO Carsten Spohr is betting on the return of holiday travel rather than business travel in the post-crisis period by the creation of Ocean, which will offer flights to tourist destinations in Europe and overseas from the major Lufthansa hubs, mainly Frankfurt and Munich. The move has prompted speculation that the airline is seeking to create a holiday company to compete with TUI Group and Condor.
Meanwhile, the German airline has been back in the headlines again regarding its €9bn government bail-out that came with a requirement to relinquish 24 slots at its main hubs in Frankfurt and Munich to competitors. The UK Financial Times newspaper reports the airline hitting out at the European Commission for enforcing such measures, stating that it was “incomprehensible that the EU Commission should intervene in this sensitive production structure during the worst crisis in civil aviation”. The two hubs are critical to Lufthansa’s competitiveness due to the market it serves. The airline claims that without the traffic it picks up at those hubs from connecting flights to long-haul destinations, some routes will become uneconomically viable. Regardless of this as a major issue, the board and shareholders voted in favour of the deal, which provides the airline with a much-needed lifeline.
Last week, Lufthansa released details of a the next phase in its restructuring programme that includes the reduction in size of its leadership and board management by 20%, as well as the loss of 1,000 administration roles and the potential for the further loss of 22,000 jobs that are currently surplus to requirements. The plan also aims to reduce government loans and equity participations “as quickly as possible to avoid a further increase in interest charges.
The already planned reduction of its fleets will continue with 22 Lufthansa aircraft already phased out ahead of schedule, including six A380s, 11 A320s and five 747-400s. Financial planning up to 2023 provides for the acceptance of a maximum of 80 new aircraft into the Lufthansa Group carriers’ fleets, which will reduce the investment volume for new aircraft by half.