Germany’s Lufthansa says it doesn’t anticipate air journey demand to return to pre-crisis ranges earlier than 2024 as a steep drop in income pushed it to its worst-ever quarterly working lack of 1.7 billion euros ($2bn).
The airline mentioned on Thursday the collapse in demand for air journey because of the coronavirus pandemic meant it carried 96 % fewer passengers between April and June than a yr earlier, resulting in an 80 % drop in second-quarter income to 1.9 billion euros ($2.3bn).
Despite value cuts, it posted an working lack of 1.7 billion euros ($2bn), adjusted for objects comparable to exchange-rate fluctuations and asset gross sales, in contrast with 754m euros ($895m) a yr earlier – the worst quarterly outcome within the firm’s 67-year historical past.
“We are experiencing a caesura in international air site visitors. We don’t anticipate demand to return to pre-crisis ranges earlier than 2024,” Chief Executive Carsten Spohr mentioned, including the corporate wouldn’t be spared a “far-reaching restructuring” of its enterprise.
The firm, which had 129,400 workers as of the tip of June, mentioned pressured redundancies can not be dominated out in Germany.
Lufthansa mentioned final month it might minimize 20 % of its management positions and 1,000 administrative jobs because it seeks to repay a 9 billion euro ($10.7bn) state bailout and navigate deepening losses within the face of the coronavirus pandemic.
The bailout has saddled the German service with a mountain of debt and better curiosity funds which it wanted with a view to keep away from insolvency. It has obtained 2.three billion euros ($2.7bn) of the power because the begin of July.
A sale of belongings together with a stake within the group’s aircraft-maintenance arm and the remainder of its in-flight catering enterprise may very well be a technique of lowering the debt burden, analysts have mentioned, although the group didn’t point out disposals in its assertion.
Shares of Lufthansa have fallen 50 % thus far this yr, in contrast with a 45 % decline within the six-member Bloomberg EMEA Airlines Index.
Lufthansa mentioned it plans to extend short- and medium-haul capability to about 40 % of the prior-year interval within the third quarter and to about 20 % of pre-coronavirus ranges on long-haul routes.
In the fourth quarter, it expects short- and medium-haul capability to rise to 55 % and to 50 % on long-haul routes. Rival Air France-KLM, which additionally secured state-backed help, goals to function at two thirds of pre-virus capability earlier than the tip of the yr.
The firm mentioned it expects to submit an adjusted working loss within the second half of 2020 and an additional vital decline in adjusted working revenue for the full-year resulting from very restricted operation of vital long-haul routes.