Germany’s largest airline Lufthansa posts record losses in 2020
Friday, March 5th, 2021
(Xinhua) -- After a profit of 1.2 billion euros in 2019, Germany's largest airline Lufthansa posted record losses of 6.7 billion euros (8.1 billion U.S. dollars) for the fiscal year 2020, the company announced on Thursday.
Demand fell "dramatically" due to the COVID-19 pandemic, causing revenues of the airline to plummet more than 60 percent year-on-year to 13.6 billion euros.
"The past year was the most challenging in the history of our company," said Carsten Spohr, chief executive officer (CEO) of Lufthansa, stressing that "travel restrictions and quarantine have led to a unique slump in demand for air travel."
Unlike passenger air travel, Lufthansa's freight division reported rising demand and reached record earnings with an adjusted EBIT (earnings before interest and taxes) of 772 million euros despite declining total freight capacity.
Despite rapid and extensive cost reductions, adjusted EBIT fell to minus 5.5 billion euros. According to Lufthansa, restructuring measures "limited the impact of the intensified pandemic situation on earnings."
After a reduction of its workforce, the number of employees at Lufthansa declined by about 20 percent to 110,000. Personnel costs were "significantly reduced" by crisis agreements and short-time working, according to the company.
In Germany alone, Lufthansa plans to cut 10,000 more jobs if corresponding personnel costs were not compensated. The airline's fleet would be reduced to 650 aircraft in 2023 and capacity would only return to 90 percent by the middle of the decade.
For fiscal 2021, Lufthansa still expects a negative operating result, measured in terms of adjusted EBIT, but with lower losses. (1 euro = 1.20 U.S. dollars).