Lufthansa Further Reduces Working Time and Capacity

As an immediate consequence of the undiminished heavy economic burdens, Lufthansa`s Executive Board today decided on further far-reaching measures. Working hours will be reduced to 35 hours a week with a corresponding reduction in remuneration. This applies to all ground personnel employed in Germany including the corporate control and service functions of Deutsche Lufthansa AG. In addition, capacity will be reduced by another 15 aircraft in continental traffic. As a result, Lufthansa together with its regional partners will have a total of 70 aircraft out of service.
The second stage of the reduction in working hours should become effective at the latest on 15 May, after the existence of the prerequisites for the further reduction in working hours has been agreed with the operating partners. The Executive Board expects passenger business revenue to decline by around 20 percent in April 2003 compared to the same month last year. Thus, the limit agreed on in the arbitration process for the initiation of the second stage of the reduction in working hours has been significantly exceeded.
The considerable reduction in demand in the passenger business is due not only to the persisting depressed economic situation and the consequences of the Iraq war, but also to the continuing high degree of uncertainty among travelers to Asia because of SARS. These three factors have plunged the aviation business worldwide into its worst-ever economic crisis. The demand on some Asian routes has slumped dramatically by up to 85 percent and calls for corresponding measures: among other things, the offer of flights to Hong Kong will be reduced from 13 to three weekly flights. Furthermore, on many long-distance routes smaller aircraft will be used.
“Even these measures are not sufficient”, according to Lufthansa`s Chairman and CEO Jürgen Weber. “In a combined and coordinated action with internal and external partners, we will develop solutions which in the long run will put Lufthansa in a cost competitive strong position.