Air Freight News

Lufthansa freezes hiring as coronavirus outbreak squeezes demand

Deutsche Lufthansa AG is adopting a package of cost-saving measures, including a hiring freeze, as the economic fallout of the coronavirus starts to bite. The shares fell to a six-month low.

While it cannot yet estimate the impact of the virus on earnings, Lufthansa is putting all hiring on hold and offering employees unpaid leave effective immediately, the German airline said Wednesday in a statement. It’s also looking at expanding part-time work options.

Global cases of the new coronavirus currently total 80,991, with China accounting for the bulk of those as well as most of the deaths. Concern is growing that the outbreak could develop into a pandemic. Parts of northern Italy—the Lufthansa group’s second-biggest foreign market, after the U.S.—are under a lockdown after an outbreak there.

Lufthansa and its Swiss and Austrian arms have already scrapped all flights serving mainland China until the end of March. It said it’s planning further cuts to Hong Kong after reducing capacity there. The measures translate into the equivalent of 13 idle aircraft.

Shares of Lufthansa fell as much as 3.6% to 12.93 euros, the lowest intraday price since Aug. 16, and were down 3.3% as of 10 a.m. in Frankfurt.

The carrier is also scrapping all flight attendant and station personnel training courses that were due to begin in April. In administrative areas, the core Lufthansa brand will reduce project volume by 10% and the budget for material costs by 20%, it said.

The group will present fourth-quarter earnings on March 19, when it will comment more on the outbreak, Lufthansa said.

Bloomberg
Bloomberg

{afn_job_title}

© Bloomberg
The author’s opinion are not necessarily the opinions of the American Journal of Transportation (AJOT).

Similar Stories

JAS Worldwide signs SPA with International Airfreight Associates B.V.

JAS Worldwide, a global leader in logistics and supply chain solutions, and International Airfreight Associates (IAA) B.V., a prominent provider of comprehensive Air and Ocean freight services headquartered in the…

View Article
https://www.ajot.com/images/uploads/article/LATAM-Plane.png
LATAM is once again part of the Dow Jones Sustainability Index
View Article
https://www.ajot.com/images/uploads/article/Wizz_Air.png
CPaT partners with Wizz Air, Europe’s leading ultra-low-cost airline, to enhance aviation training
View Article
https://www.ajot.com/images/uploads/article/Photo-2_YQB-TQO.jpg
Air Transat takes off to Tulum from Montreal and Quebec City
View Article
https://www.ajot.com/images/uploads/article/KLM.jpg
Air France KLM Martinair Cargo achieves record online sales and accelerates commercial transformation
View Article
[Freightos Weekly Update] Frontloading continues to put pressure on transpacific rates

Transpacific ocean rates increased slightly last week and are about 15% higher than at the start of December as frontloading ahead of expected tariffs is keeping vessels full.

View Article