German flag carrier Deutsche Lufthansa AG yesterday posted a third-quarter net loss of 2 billion euros (US$2.35 billion) as it prepares for a “hard and challenging” winter amid COVID-19 pandemic lockdowns.
Europe’s largest airline said that it would fly a maximum of 25 percent of normal capacity from last month through next month, and expects to burn through 350 million euros per month.
“We are now at the beginning of a winter that will be hard and challenging for our industry,” Lufthansa chief executive officer Carsten Spohr said in a statement.
After its revenue crashed in the first wave of the pandemic, the airline was in June propped up by the German government, which pumped in 9 billion euros of liquidity for a 25 percent stake.
However the return of restrictions on movement in the country, alongside even stricter lockdowns in countries such as France and Britain, has “significantly worsened” the outlook for air travel, Lufthansa said.
Spohr urged the introduction of “widespread rapid tests” for COVID-19 to reduce the need for lengthy quarantines, which airlines say are deterring travelers.
The airline said that it remains on track to return to positive operating cash flow next year — but only if the “situation allows for an increase in capacity to around 50 percent of precrisis levels.”
In the three months to September, the carrier reported a net loss of 2 billion euros, compared with a 416 million euro profit in the same period last year, as it carried just 20 percent of its usual passenger numbers.
Losses were reduced due to “strict cost savings and the expansion of our flight program” in the summer months, Spohr said.
Lufthansa 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 yesterday said that 27,000 full-time positions were “surplus.”
The airline’s board said 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 and Brussels Airlines, as well as Eurowings, hopes to remain “the leading European airline group” after an “inevitable restructuring,” Spohr said.
SETTING AN EXAMPLE: The commission suspended the bank’s two top executives as ‘a warning to all banks,’ while the fine is the biggest to be given to a bank in a single case The Financial Supervisory Commission (FSC) yesterday fined E.Sun Commercial Bank (玉山銀行) NT$20 million (US$693,698) over a theft scandal and punished the bank’s two top executives. A customer relationship manager surnamed Pan (潘) at the bank’s branch in Kaohsiung’s Fengshan District (鳳山) stole NT$140 million from 41 clients over the past seven years, the commission said. Pan secretly transferred the stolen money to accounts belonging to her and her family members by using clients’ debit cards, passwords or documents that were stamped using the clients’ personal stamps between July 2013 and June this year, the commission said. The commission suspended Ben Chen (陳炳良), the
Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain the third-largest IC supplier this year, unchanged from last year, IC Insights said yesterday. IC designer MediaTek Inc (聯發科) is expected to become the 11th-largest, up from 16th last year, the semiconductor market research firm said. TSMC is expected to post US$45.42 billion in sales, up 31 percent from last year, IC Insights said in a report released on its Web site. TSMC’s sales growth is largely due to a surge in orders from Apple Inc and HiSilicon Technologies Co (海思半導體) — two of its major clients — which
HARD ASK: At a meeting held by the MOEA to talk about the RCEP trade deal, trade associations said that they expect the government to push for more free-trade deals Business representatives yesterday urged the government to slow the appreciation of the New Taiwan dollar, saying that some Taiwanese industries have been undercut by rivals due to unfavorable foreign exchange rates. The government should also assist local industries to expand their domestic market, and push for more bilateral trade deals so that Taiwanese companies can enjoy zero or preferential tariffs on exports, following the nation’s exclusion from the Regional Comprehensive Economic Partnership (RCEP) which was signed by 15 Asia-Pacific nations on Nov. 15, they said at a meeting with the Ministry of Economic Affairs (MOEA). Some participants said that the NT dollar’s
BREATH OF LIFE: The firm said the under-utilized plant should start mass production in the first quarter, timed to coincide with Intel Corp’s release of its Ice Lake server chip Hon Hai Precision Industry Co (鴻海精密) plans to assemble key components for Google servers at its plant in Wisconsin, people familiar with the matter said, finally breathing life into a factory that US President Donald Trump hailed as crucial to bringing manufacturing back to the US. The company has decided to locate production for this new contract at the existing complex rather than make the components at home or in China, the people said, asking not to be identified. The under-utilized plant should start mass production in the first quarter, timed with the release of Intel Corp’s Ice Lake server chips,