Facing a revised demand forecast roughly half of what it previously anticipated, Lufthansa will move its remaining A380s and A340-600s into long-term storage. The carrier expects that they will “only be reactivated in the event of an unexpectedly rapid market recovery.” The move affects eight A380 and ten A340-600 planes.
The continuing high level of uncertainty in global air traffic makes short-term adjustments to the current market situation unavoidable for the foreseeable future.
Lufthansa now expects to operate 20-30% of its 2019 levels of flight capacity in Q4 2020. Earlier this summer, amidst “slight signs of recovery were still evident in July and August,” the Group expected to hit 50% of 2019 numbers in the 2020 recovery.
The aircraft moves come as part of a Lufthansa Group-wide plan to operate 150 fewer planes by the middle of the decade than at the beginning of this year. The company also expects to increase its “personnel surplus” from the previously indicated 22,000 as a result of fewer aircraft operating. By Q1 2021 a “streamlined management structure” anticipates 20% lower staffing levels in the management ranks.
The cuts are not – at least for now – quite as dramatic as tipped by Bloomberg earlier this month. That report also had the 747-400s parked, with the 747-8i the only quad-jets remaining in service. It appears the 744s received a reprieve.
While the quad-engine jets are less efficient per passenger-mile than their twin-engine counterparts, that appears to be low on the list for criteria in choosing which to park. So does passenger comfort/satisfaction scores. The A380 in particular always rates well on that front. But the planes are massive. The A380 carries 509 seats in the Lufthansa configuration. The 747s can swap in with 25% lower capacity (~370 seats in the current layouts), even including a first class cabin still on the –8i variant. The A346 carries 297. The A350-900 holds a similar number of passengers but operates with significantly lower trip costs, even if that also means shedding first class service on some routes.
A plea for improved testing capabilities
Perhaps most notable in the Lufthansa release is not the cuts, but the plea by the Board of Directors for more action from governments. Rather than just hoping more money shows up the Lufthansa Board specifically highlights the power of passenger testing to remove quarantine rules and improve passenger flow.
The Board considers the expansion of tests prior to departure an essential prerequisite for the resumption of global mobility. Consistent testing is possible, increases safety for travelers and is a better alternative than changing inconsistent entry and quarantine regulations.
This is not the first time the airlines pushed in this direction, but it is one of the more explicit calls for reopening intercontinental travel corridors with stronger passenger safety guidelines and coordinated efforts.
Ultimately the move lets the company save cash. Lots of it. Lufthansa hopes to reduce cash burn to just 400 million euro per month by the end of the year. That’s still a huge amount of money to be losing and not a sustainable rate by any means.
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