Lufthansa, flight attendant union UFO agree on cost-saving measures

Source: Xinhua | 2020-06-26

Germany's largest airline Lufthansa and flight attendants' union UFO agreed on cost-saving measures worth more than half a billion euros, the airline has announced.

The bundle of measures would include a suspension of remuneration increases, a reduction in flying hours with a corresponding reduction in remuneration as well as temporarily reduced contributions to the company pension scheme, Lufthansa said.

"This deal is an important signal to our employees, our shareholders and to tomorrow's extraordinary general meeting," said Michael Niggemann, member of the airline's executive board.

The deal would further be "a sign of a regained and constructive social partnership with the UFO," he added.

Lufthansa, as multiple airlines throughout the world, had recorded heavy losses since the beginning of the year due to the effects of the COVID-19 pandemic when almost all of flights had been canceled.

Shares of Lufthansa fell by more than 40 percent since mid-February. In the past two years, the airline had lost almost two-thirds of its market capitalization. As a result, Lufthansa was recently downgraded from Germany's top DAX index of the country's 30 largest listed companies.

On Thursday, shareholders of Lufthansa are scheduled to decide on governmental participation as part of a stabilization package worth 9 billion euros (10 billion U.S. dollars).

Throughout the COVID-19 crisis, Carsten Spohr, chairman of the executive board of Lufthansa, reminded that global air traffic had come to a "virtual standstill" and that the airline would rely on governmental funding since losses had been severe.

In the first quarter, revenues of Lufthansa fell by 18 percent year-on-year to 6.4 billion euros, resulting in a net loss of 2.1 billion euros, the airline announced earlier in June.