Lufthansa May Cut 22,000 Jobs Due to Coronavirus Pandemic
Shares of the German National Airline Has Plummeted 9%
The German airline Lufthansa may cut 22,000 jobs as the company is struggling to keep afloat amid the coronavirus pandemic that has severely affected the entire airline industry across the world. The company’s stock shares have fallen 9% since the news was made public on Thursday. A slow and steady recovery is being predicted by the corporation in the upcoming future. Due to the current world crisis, around 100 aircrafts owned by Lufthansa have been grounded due to decreased passenger load.
Lufthansa suffering amid coronavirus pandemic
The German national airline company Lufthansa may cut 22,000 jobs amid the current global crisis. Out of the total reduction in employees, half of them are located in Germany, while the rest are spread across the world. The corporation is fully trying to avoid forced and complete termination by reducing the working hours and other multiple adaptations.
These terms and conditions regarding Lufthansa may cut 22,000 jobs were finalized on Wednesday by the board members of the corporation. The company is trying its best to prevent a notable reduction in personnel costs while trying not to weaken the airline when the company is able to resume its flight operation across the globe.
In the initial months of the coronavirus pandemic, the German airline has predicted to let go of 10,000 working employees, but as the global catastrophe is rapidly increasing, Lufthansa may cut 22,000 jobs. This doubling of employee reduction signifies the critical situation of the airline industry suffering from the consequences of a worldwide plague.
In the previous month, Lufthansa has agreed with the German government to provide more than $10 billion to help aid the country from collapsing. The government will take a 20% stake in the national airline of Germany, which would later be sold in 2023. This deal will be approved by the board of directors and shareholders of the firm, along with the European Commission.
The downside of this deal is that the European Union has taken away key landing spots in the major airports of Munich and Frankfurt. The final deal was approved by the authorities after the airline agreed to shift 24 landing and takeoff slots to their rival airline companies along with multiple aircraft from their massive fleet. The final seal of approval will be done on June 25 as Lufthansa may cut 22,000 jobs from their firm.
Stock shares of Lufthansa
The stock of Lufthansa has pummeled 9% due to the current coronavirus outbreak across the world as Lufthansa may cut 22,000 jobs. Across the world, numerous countries have implemented travel restrictions along with closing down of their international borders to prevent further transmission of the COVID-19 infectious pathogen. Due to these rapidly escalating coronavirus cases, which have now reached 7,538,414 globally, the entire airline industry has been grounded to prevent further spread of infection. As the coronavirus pandemic is slightly reducing after strict implementation of preventive measures, several airlines, including EasyJet, Emirates, and Transavia, have announced to resume their flight operation in various countries across the world.
Multiple United States airlines, including Delta, United, and American, have made an agreement with the United States Treasury Department for a rescue deal which is worth billions of dollars in the month of April.
Job cuts in the airline industry
The German airline’s extensive job termination comprises 16% of the total employees working for the corporation as Lufthansa may cut 22,000 jobs. The company is critically suffering from the lasting impact of coronavirus pandemic, which will require multiple years to fully recover.
British Airways have recently announced to terminate 12,000 jobs from their corporation. The 30% administration workers and other staff will be let go by American Airlines while the leading American aircraft manufacturing company Boeing will be reducing 13,000 employees working under their company.