German flag carrier Lufthansa on Thursday posted a third quarter net loss of €2.0 billion as it prepares for a “hard and challenging” winter amid lockdowns to curb the coronavirus pandemic.
Europe’s largest airline said it will fly a maximum of 25 per cent of normal capacity from October to December and expects to burn through €350 million in cash a month.
“We are now at the beginning of a winter that will be hard and challenging for our industry,” chief executive Carsten Spohr said in a statement.
After its revenues crashed in the first wave of the coronavirus pandemic, the airline was propped up in June by the German state which pumped in €9 billion of liquidity for a 25 per cent stake.
But the return of restrictions on movement in its home territory of Germany, alongside even stricter lockdowns in countries such as France and Britain, has “significantly worsened” the outlook for air travel, Lufthansa said.
CEO Spohr urged the introduction of “widespread rapid tests” for the virus, in order to reduce the need for lengthy quarantines which airlines say are deterring travellers.
The company remains on track, it said, to return to positive operating cash flow in 2021 – but only if the “situation allows for an increase in capacity to around 50 per cent of pre-crisis levels”.
In the three months to September, the carrier reported a net loss of €2 billion, compared with a €416 million profit in the same period last year, as it carried just 20 per cent of its usual passenger numbers.
Losses were reduced due to “strict cost savings and the expansion of our flight programme” in the summer months, Spohr said.
Lufthansa succeeded in cutting the outflow of funds at the start of the pandemic from €1 million per hour to “only” €1m every two hours, it said in October.
Lufthansa succeeded in cutting the outflow of funds at the start of the pandemic from €1 million per hour to ‘only’ €1m every two hours
The airline had previously warned that 30,000 jobs were under threat as it scaled down its winter schedule to levels not seen since the 1970s, and on Thursday said that 27,000 full-time positions were “surplus”.
Lufthansa’s board says it aims to find agreements to “limit the number of redundancies required” through short-time working and pay cuts.
Lufthansa, which includes subsidiaries Swiss, Austrian, Brussels Airlines and Eurowings, hopes to remain “the leading European airline group” after an “inevitable restructuring,” Spohr said.