Lufthansa abandons offices to slash costs

Bloomberg

Deutsche Lufthansa AG told staff that winter schedule cutbacks will cause it to bench an additional 125 aircraft and temporarily close large parts of its administrative operations.
The reduction will cut the carrier’s active fleet back to the level it operated in the 1970s, with the impact filtering through its operations, it said in a letter to employees seen by Bloomberg. Lufthansa had previously intended to use the planes in an already reduced schedule for the coming months, it said in the letter.
“Winter will be an even bigger challenge,” according to the letter, signed by CEO Carsten Spohr and his fellow board members. “We managed to reduce cash burn from 1 million euros every hour when the pandemic started to ‘only’ 1 million euros every two hours now. Still, that hasn’t changed the drama of the situation.”
The move sheds light on the operational impact of the announcement that Lufthansa will fly only 25% of its planned winter schedule. The company will operate with only the
minimum necessary resources, and Lufthansa’s airlines will use smaller and younger aircraft where possible, the managers told staff. Its low-cost arm Eurowings will fly less than 30 jets during winter and give up its office space in Dusseldorf. Most of the group’s headquarters at Frankfurt airport will also close.
Lufthansa reported a narrower loss in the third quarter citing cost reductions and a modest rebound in flights. The adjusted loss of $1.49 billion before interest and taxes was smaller than the second-quarter loss and a better result than analysts had expected.