Lufthansa to shed biggest planes in its fleet shakeup

Bloomberg

Deutsche Lufthansa AG plans to eliminate its biggest passenger jets as it deepens fleet cuts, creating a knock-on in additional job losses, people with knowledge of the proposals said.
Lufthansa is looking at retiring remaining Airbus SE A380 double-deckers, the bulk of smaller A340s, and all of its older Boeing Co 747-400 jumbos, according to the people, who asked not to be named discussing a confidential matter. There would also be a cull of narrow-body planes that feed longer routes, they said.
The fleet cuts would surpass the 100-aircraft reduction so far disclosed by Lufthansa, net of new deliveries, with job losses exceeding the 22,000 that the carrier had said such a contraction would entail, said the
people. No final decision has been made on the measures, they said. A spokesman for Lufthansa declined to comment.
Europe’s biggest airline is falling back on its most economically sustainable routes
as the coronavirus crisis roils global travel markets. Retiring thirsty four-engine aircraft will remove high-capacity models that are hardest to fill and will help Lufthansa boost margins by slashing fuel burn.

Unpopular Models
The move follows rivals around the world that are bidding farewell to the world’s biggest jets pressured by increasing competition, more potent two-engine models and a shift toward point-to-point services. “The paradigm now, as
illustrated also by Air France-KLM or IAG, seems to be to immediately get rid of aircraft that you don’t want,” said Stephen Furlong, an airline analyst at Davy Stockbrokers in Dublin. Lufthansa also needs to recast its business model to take account of anticipated long-term declines in corporate travel and the number of people taking connecting flights, he said.
The pandemic has thrown Lufthansa into a spin, forcing it to accept $11 billion in state aid to survive. Hopes for a quick rebound have been dashed by a surge in Covid-19 cases across Europe, with carriers including EasyJet Plc and British Airways owner IAG SA paring expansion plans.
Lufthansa may keep a handful of younger A340-600s, preserving capacity for busier routes, the people said. That would also reduce the size of immediate writedowns, which will factor into its decision making, one person said.
Operating a wide-body jet like Lufthansa’s newest Airbus A350 requires about 220
people including flying staff, maintenance, catering and
administrative positions, the carrier says, meaning the loss of 10 long-haul planes could see more than 2,000 jobs go.