Readers will now have seen yesterday’s media reports that Lufthansa intends to cut around 22,000 jobs.
According to France’s La Tribune [FR] this figure includes employees not just of Lufthansa mainline but also its subsidiaries Eurowings, Austrian, Swiss and Brussels Airlines.
La Tribune says that news of these substantial redundancies has emerged after the airlines in question have been granted state aid – see below.
Staff reductions have been made because the airline industry does not expect aviation to return to normal for a number of years.
Indeed in the case of British Airways and Virgin Atlantic, many thousands of staff are facing the possibility of being made redundant, even while those airlines have received or are attempting to access aid from the UK government.
In contrast, although Air France recently received 7 billion Euros of aid, there has been no news yet of any reduction in staff.
La Tribune reports that Air France will “unveil its workforce reduction plan” in early July and there will be pressure on it to follow other airlines in attempting to ‘right-size’ for the depressed demand for aviation many expect for the near and medium future. The French government will be expecting it to reform itself.
Air France had previously (before COVID-19) been under pressure to become more efficient. The matter emerged in April at the time Air France was awarded its recent state aid package.
Bruno Le Maire, France’s economy and finance minister told Bfmtv (a major TV station in France) “I want to reiterate that this support for Air France is not a blank cheque. Air France will have to make efforts [to make changes in the way it operates].”
So we await developments.
State aid to Lufthansa Group is as follows: Lufthansa mainline / Eurowings Euros 9 billion (but awaits ratification from shareholders on June 25), Swiss and Edelweiss Euros 1.2 billion, Austrian Airlines 450 million Euros.
Brussels Airlines was expected to receive state aid but today’s Belgian media reports [BE] of tricky negotiations between the government and Lufthansa which have stalled matters.
- UPDATE: News has emerged this afternoon that France’s La Compagnie (a niche all business class carrier) has secured Euros 10 million state loan.