German airline giant Deutsche Lufthansa AG yesterday said that it would undergo “far-reaching” restructuring as it posted a first-quarter net loss of 2.1 billion euros (US$2.35 billion), hammered by the COVID-19 pandemic.
“Global air traffic has come to a virtual standstill in recent months. This has impacted our quarterly results to an unprecedented extent,” it said.
“In view of the very slow recovery in demand, we must now take far-reaching restructuring measures to counteract this,” Lufthansa chief executive Carsten Spohr said in a statement.
Photo: Reuters
On top of the collapse in passenger numbers, depreciation of some company assets sapped the bottom line, the statement said.
Falling fuel prices cost the airline 950 million euros, because it had hedged its purchases with much higher-priced contracts.
The first quarter — a slow season for travel — was much worse than the loss of 342 million euros booked a year earlier.
The airline’s supervisory board on Monday approved a bailout deal of 9 billion euros from the German government. The group is to ask its shareholders to back the accord at an online meeting on June 25.
The bailout would see the German government take a 20 percent stake in the group, with an option to claim a further 5 percent plus one share to block hostile takeovers.
That would make the federal government Lufthansa’s biggest shareholder.
Like its rivals, Lufthansa Group — which also includes Eurowings GmbH, Swiss International Airlines AG, Brussels Airlines and Austrian Airlines — has been battered by the pandemic.
The airline said it plans to increase seat capacity in September to “up to 40 percent” of what was expected before the pandemic, and compared with about 3 percent last month.
However, of its 760 aircraft, 300 are expected to remain parked next year and 200 in 2022.
Even with the hoped-for gradual ramp-up of passenger traffic, Lufthansa’s push to repay the bailout cash “will only succeed if we implement restructuring programs in all areas... and agree on innovative solutions with the unions and working councils,” finance director Thorsten Dirks said.
Brussels is slashing its fleet by 30 percent and its workforce 25 percent, while Austrian would have 20 percent fewer planes and aims to cut personnel costs by the same amount.
Over the long term, the flagship airline might have 100 planes too many, giving an overhang of 10,000 jobs, Spohr said last month.
Other divisions at Lufthansa face similar cost-cutting programs, while the company is in talks with aircraft builders to postpone deliveries of new planes and is eyeing sales of non-core business units.
“The uncertain further development of the corona pandemic continues to make it impossible to make a precise forecast of the earnings trend for 2020,” the group said, predicting only a “significant decline” in adjusted operating profit.
The Eurovision Song Contest has seen a surge in punter interest at the bookmakers, becoming a major betting event, experts said ahead of last night’s giant glamfest in Basel. “Eurovision has quietly become one of the biggest betting events of the year,” said Tomi Huttunen, senior manager of the Online Computer Finland (OCS) betting and casino platform. Betting sites have long been used to gauge which way voters might be leaning ahead of the world’s biggest televised live music event. However, bookmakers highlight a huge increase in engagement in recent years — and this year in particular. “We’ve already passed 2023’s total activity and
Nvidia Corp CEO Jensen Huang (黃仁勳) today announced that his company has selected "Beitou Shilin" in Taipei for its new Taiwan office, called Nvidia Constellation, putting an end to months of speculation. Industry sources have said that the tech giant has been eyeing the Beitou Shilin Science Park as the site of its new overseas headquarters, and speculated that the new headquarters would be built on two plots of land designated as "T17" and "T18," which span 3.89 hectares in the park. "I think it's time for us to reveal one of the largest products we've ever built," Huang said near the
China yesterday announced anti-dumping duties as high as 74.9 percent on imports of polyoxymethylene (POM) copolymers, a type of engineering plastic, from Taiwan, the US, the EU and Japan. The Chinese Ministry of Commerce’s findings conclude a probe launched in May last year, shortly after the US sharply increased tariffs on Chinese electric vehicles, computer chips and other imports. POM copolymers can partially replace metals such as copper and zinc, and have various applications, including in auto parts, electronics and medical equipment, the Chinese ministry has said. In January, it said initial investigations had determined that dumping was taking place, and implemented preliminary
Intel Corp yesterday reinforced its determination to strengthen its partnerships with Taiwan’s ecosystem partners including original-electronic-manufacturing (OEM) companies such as Hon Hai Precision Industry Co (鴻海精密) and chipmaker United Microelectronics Corp (UMC, 聯電). “Tonight marks a new beginning. We renew our new partnership with Taiwan ecosystem,” Intel new chief executive officer Tan Lip-bu (陳立武) said at a dinner with representatives from the company’s local partners, celebrating the 40th anniversary of the US chip giant’s presence in Taiwan. Tan took the reins at Intel six weeks ago aiming to reform the chipmaker and revive its past glory. This is the first time Tan
RSS