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Lufthansa posts 2.1 billion euro loss after ‘drastic decline’ in air journey within the first quarter

Lufthansa posts 2.1 billion euro loss after 'drastic decline' in air travel in the first quarter

Lufthansa airplanes are parked on the tarmac at Frankfurt airport, Germany.

Ralph Orlowski | Reuters

Lufthansa reported a considerable loss for the primary quarter and mentioned restructuring was mandatory as its outcomes have been “considerably impacted” by the Covid-19 pandemic.

The German airline reported a web lack of 2.1 billion euros ($2.35 billion) for the primary three months of the yr on Wednesday. This in comparison with a lack of 342 million euros over the identical interval the yr earlier than.

It comes as passenger numbers dropped by greater than 26% within the first quarter, in comparison with a yr in the past. 

Write-downs contributed to the loss, with Lufthansa recording an impairment cost of 266 million euros on decommissioned plane. It additionally wrote down 100 million euros on the ebook worth of its catering unit LSG North America and 57 million euros on finances airline Eurowings.

Wednesday’s outcomes have been initially scheduled for April 30, however have been postponed as a result of uncertainty surrounding the Covid-19 pandemic. 

“World air site visitors has come to a digital standstill in current months. This has impacted our quarterly outcomes to an unprecedented extent. In view of the very gradual restoration in demand, we should now take far-reaching restructuring measures to counteract this,” Carsten Spohr, chairman of the manager board of Lufthansa, mentioned in an announcement.

There are indications that the second quarter will even be closely impacted by the pandemic, as journey bans internationally continued to hit airways. 

Lufthansa reported a 98.1% drop in passenger numbers in April from a yr in the past, whereas passenger and freight numbers in Could have been additionally “considerably decrease.”  The group parked 700 of its 763 plane in April and Could. 

The airline mentioned it does not count on the present disaster to finish earlier than 2023, and forecast that 300 airplanes will stay parked in 2021, and 200 in 2022. 

“From mid-June, nevertheless, the Lufthansa Group’s airways can be considerably increasing their schedules to round 2,000 weekly connections to greater than 130 locations worldwide,” the corporate assertion mentioned.

“The purpose is to make as many locations accessible once more for holidaymakers and enterprise travellers.”

Smaller fleet

In an effort to chop prices, the German airline mentioned it had lowered the hours of 87,000 staff and postponed or cancelled some initiatives deliberate previous to the disaster.

Moreover, Brussels Airways and Austrian Airways — a part of the Lufthansa group — will lower their fleet by 30% and 20% respectively, in addition to lower their headcounts by 25% and 20% respectively. 

There will even be further restructuring measures in different firms that are a part of the broader Lufthansa Group.

These measures come after an settlement with the German authorities for monetary assist. The corporate agreed at hand over as much as 24 take-off slots to opponents at Frankfurt and Munich airports in trade for 9 billion euros ($10.05 billion) in assist from the German authorities.

As a part of the deal, the German authorities will get a 20% stake in Lufthansa.

Shares of the airline are down greater than 42% year-to-date.