Frankfurt. Berlin When Lufthansa presents its business figures for 2021 on March 3, there will be good news for the workforce: Europe’s largest airline group will end its downsizing and job cuts will be stopped. This is reported by several people from the environment of the Supervisory Board and from management circles. A Lufthansa spokesman confirmed the information in principle, but referred to the presentation of the balance sheet for further details.
There are two reasons why no further staff is to be cut for the time being. On the one hand, Lufthansa is about where the management wanted to be in terms of workforce size. The group will end up with just under 107,000 full-time jobs. During the crisis, Lufthansa boss Carsten Spohr always mentioned the value of 100,000 jobs as the lower limit.
On the other hand, the Management Board is convinced that the remaining employees are needed for the planned and expected growth. According to management circles, the current personnel capacity matches the internal scenarios.
For Lufthansa, it is already an obstacle to the planned growth that the Boeing 787, the so-called Dreamliner, will probably have to wait longer than expected. So far, the group hopes that the first aircraft of this model will arrive in the current quarter. The planes are needed by summer at the latest, CEO Spohr said recently. But the date is shaky because of the manufacturing problems at Boeing.
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After the Christmas season was disappointing due to the Omicron wave and the group experienced a significant slump in bookings at the beginning of the year, passengers are now returning. Lufthansa board member Harry Hohmeister spoke to the “Bild am Sonntag” at the weekend of a “strongly increasing demand for holiday flights for Easter, Whitsun and also for the summer”.
On some routes, the number of bookings is even three times higher than before the pandemic. The company is therefore planning, like last year, to fly to Mallorca with the Boeing 747, the jumbo jet.
Fewer planes, fewer crew
“If you look at the current quarter, we expect challenging average yields,” writes Alexander Irving from Bernstein Research in a current study at the beginning of the week, aiming for a strong price war. On the other hand, a strongly growing number of bookings is expected for Easter and the summer. “It’s simply not possible to have fewer staff,” said a Lufthansa executive.
CEO Spohr had declared quite early in the crisis that the airline group would have to shrink significantly. He justified this with the upheaval in the industry. Since it will probably be several years before passenger numbers can reach the pre-crisis level again, the new Lufthansa will be smaller for the time being. In addition, the group is heavily dependent on business travel. According to general opinion, it will grow again later and more slowly than private travel.
This has consequences for the size of the airline group. Lufthansa had 138,000 full-time jobs worldwide shortly before the start of the pandemic, but according to the interim report at the end of September last year there were only 107,000.
Instead of around 800 aircraft as before the crisis, only a good 720 aircraft were still flying for the group at the end of September. As a result, fewer pilots and cabin crew are required. In addition, around 7,000 employees left the group as part of the sale of the European business of the catering subsidiary LSG. There were also cuts in administration. Around 20 percent of managers had to leave the company.
>> Read about this: 177 new jets: This is what the new Lufthansa fleet looks like – and it flies on these routes
However, the fact that the job cuts are now being stopped does not mean that the management has refrained from further cost reductions vis-à-vis the employee representatives. The top management still sees a need for action, especially with the pilots. But the talks with the pilots’ representation Vereinigung Cockpit (VC) are tough.
After the Lufthansa management unilaterally terminated the so-called Perspective Agreement (PPV) shortly before Christmas, the ice age prevailed. The PPV stipulates that the group must manage at least 325 aircraft in the so-called core companies – with pilots who are subject to the well-endowed group wage agreement. The Lufthansa leadership is demanding savings of 20 to 30 percent on short-haul routes and has threatened to fire pilots if there is no agreement.
In the eyes of the Lufthansa management, the agreed fleet size for the core brand is no longer tenable due to the long-term effects of the pandemic. Because private travel in particular is growing strongly for the time being, brands such as Eurowings and Eurowings Discover are to be strengthened – to the chagrin of VC. Now, at the end of February, a new attempt at negotiations is to be started, the outcome is open. After all, the company’s top management has meanwhile withdrawn the threat to fire pilots of the core Lufthansa brand.
Behind this should also be the realization that further staff cuts for the hoped-for restart in the summer could be tricky. On the pilot side, for example, around 400 captains took advantage of the volunteer program and left. According to the Cockpit Association, there is now more of a need for pilots at Lufthansa and no excess staff.
Lufthansa had to find out around Christmas how quickly the staffing level for the pilots can become too tight in the still unstable corona situation. Many flights had to be canceled because a surprising number of pilots had called in sick.
The Lufthansa boss is hoping for a new Dreamliner in the summer.
(Photo: imago images/sepp spiegl)
At the same time, the group is struggling with another problem. Even if the workforce has now shrunk almost as much as management had imagined, not every employee is by far where they are needed. There are still overhangs in some places. For example, the freight subsidiary LH Cargo has just negotiated a new volunteer program with staff representatives that is specifically aimed at over 55-year-old pilots in Germany, almost 50 of them.
Personnel bottlenecks in some places
In other places, however, there is a shortage. LH Cargo, for example, is desperately looking for staff in the USA. The same applies to the caterer LSG. The legal department is particularly tight. According to management circles, many employees were poached there during the crisis. In view of Lufthansa’s plan to join the Italian ITA. understaffing of the legal profession is a tricky one. There are also bottlenecks at Lufthansa Technik, the maintenance subsidiary.
One or the other in the workforce therefore points out that the group may have downsized too quickly. Representatives of the trade unions had already pointed out this danger at the beginning of the crisis. Management, on the other hand, explains that the current situation is typical of longer periods of downsizing. “When you start volunteer programs, it’s always difficult to calculate how many will take them,” says one human resource manager.
All in all, however, the current development is a clear sign that Lufthansa is moving back to normal. This is also supported by two personal details that will be discussed at the upcoming Supervisory Board meeting: Michael Niggemann, responsible for Human Resources and Legal Affairs on the Management Board and thus also for discussions with employee representatives, and Christina Foerster, responsible for customer relations, IT and sustainability.
Both have been on the Lufthansa Group Executive Board since January 1, 2020. As usual, both initially received a three-year contract. And as it is said in the environment of the control body, both can hope for an extension of their contracts – in the spirit of regained continuity.
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