While the saga of the $9.8 billion (€9 billion) state aid package to Lufthansa is yet to get approved by its shareholders to finally end it, the group has now turned attention to cut its expenses. At the forefront of the cuts are Lufthansa’s employees and their respective unions. In a meeting with top unions, the German airline group’s executives indicated the number of employees that are redundant.

When Lufthansa’s supervisory board approved the state aid acquired from the German Economic Stabilization Fund (WSF), the chairman of the airline group Carsten Spohr stated that the “expected slow market recovery in global air traffic makes an adjustment of our capacities unavoidable.” Thus he wanted to discuss matters with “our collective bargaining and social partners” how the impact of redundancies could be softened in the “most socially acceptable way possible.”

Meanwhile, prior to the supervisory board’s approval of the deal, unions had pleaded with the European Commission (EC) to green-light the deal without any strings attached.

“Neither the employees of the Lufthansa Group, nor the citizens of Europe will understand if tens of thousands of jobs are lost not because of COVID-19, but because of conditions imposed by the EU Commission,” read the letter addressed to the President and Vice President of the EC.

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While the supervisory board of Lufthansa rejected the strings attached by the European Commission regarding the state aid deal, the pilots of various European pilot associations have pleaded to the European Commission to approve the deal without any strings.
 

However, seemingly, tens of thousands of jobs would still be lost. After a meeting with Lufthansa Group, UFO, a union representing flight attendants working in Germany, it indicated that the airline saw around 26,000 jobs that were surplus.

Previously, Lufthansa predicted that the airline would have 100 fewer aircraft in its fleet in 2023, compared to 2019.

But UFO has not seen a “partnership path” to come to a joint consensus with Lufthansa, as the union indicated that all employees of the group must “be protected against dismissal.”

Furthermore, Daniel Flohr, the chairman of the union, stated that following the regulation from Austria that essentially put a minimum price of flight tickets, Ryanair and Wizz Air have started price-dumping tickets in Germany.

“UFO and Lufthansa, therefore, agreed today that the industry will only come out of the crisis economically and ecologically if a minimum price for plane tickets is also introduced in the rest of Europe,” said Flohr.

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The Austrian government seemingly had enough with low-cost carriers and the environmental consequences of cheap travel, as newly imposed pricing policies and taxes would, essentially, impose a minimum price of flight tickets going forward.
 

Meanwhile, the president of Vereinigung Cockpit (VC), a union that represents German pilots, stated that the union offered concessions to Lufthansa that were worth up to $400 million (€350 million), as pilots would cut their wages by 45%.

“In return, we only expect the Group Executive Board to commit to its employees. Using this contribution to outsource jobs on poorer terms would be totally unacceptable and would not do justice to employee loyalty,” stated Markus Wahl, the president of VC.

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Despite its best efforts to reduce costs, Lufthansa is still on a pretty impressive cash-burning campaign, as it announced its latest results for Q1 2020.