The Executive Board of Deutsche Lufthansa AG approved the third package within the Group-wide “ReNew” restructuring program earlier today.Due to significantly lower than expected air traffic recovery, Lufthansa’s Executive Board has today adopted several measures to cut costs and preserve cashflow, including reductions in fleet size and personnel.
The outlook for international air traffic has significantly worsened in recent weeks. With the summer travel season coming to an end, passenger and booking figures are declining again, after slight signs of recovery were still evident in July and August. In view of these developments, Lufthansa has finalised decisions on the third package within their restructuring program earlier today.
In detail, the Executive Board adopted the following resolutions:
- The capacity outlook for the passenger airlines will be significantly revised; the previous assumption that an average production level of 50 percent of the previous year’s value would be reached in the fourth quarter of the year no longer seems realistic. If the current trend continues, the available seat kilometres will probably only be in a range between 20 and 30 percent, compared to the previous year.
- The medium term fleet planning will be adjusted and currently foresees a permanent, Group-wide capacity reduction of 150 aircraft by the middle of this decade (starting point is the Group fleet including wet-leased aircraft).
- In addition to the fleet changes already communicated, the following decisions have been made: After six Airbus A380s were finally taken out of service in the spring, the remaining eight A380s and ten A340-600s, which were previously intended for flight service, will be transferred to long-term storage and removed from planning. These aircraft will only be reactivated in the event of an unexpectedly rapid market recovery. In addition, the remaining seven Airbus A340-600s will be permanently decommissioned.
- The fleet decisions mentioned above will result in a further impairment of up to EUR 1.1 billion. The amount is expected to be accounted for in the third quarter of the current year.
- The previously announced personnel surplus amounting to 22,000 full-time positions will increase as a result of the decisions taken in regards to the third package within the restructuring program. The change in permanent staffing levels within flight operations will be further adjusted in regards to market development. The compensation and reduction of personnel surplus will be discussed with the responsible employee representatives.
- Irrespective of the negotiations on reconciliations of interests and social plans for redundancies within the Lufthansa Group, the Executive Board’s objective remains agreeing on crisis packages with the collective bargaining partners that limit the number of necessary redundancies.
- Despite the worsened outlook, the revised financial planning intends to further reduce cash outflows through strict cost management. The outflow of liquidity is to be reduced from currently around EUR 500 million per month to an average of EUR 400 million per month in winter 2020/21. The previously communicated Group target of returning to positive operating cash flows during 2021 is being reinforced.
- A streamlined management structure with a 20 percent reduction of management positions is to be implemented in the first quarter of 2021. To simplify and clearly define responsibilities, the functional process organization (matrix) will be focused on core functions of Lufthansa Group Airlines. For all other areas, a new management model with clearly assigned responsibilities (decentralized or centralized, depending on the process) will be introduced.
- The administrative office space will be reviewed worldwide and reduced by 30 percent in Germany.
Singapore Airlines To Bring Back The World’s Longest Non-Stop Service To JFK
Singapore Airlines (SIA) will return to New York on 9 November 2020, when it launches non-stop flights between Singapore and John F. Kennedy International Airport.
Before the pandemic, Singapore Airlines host the title of flying the world’s longest flight by a whooping distance of 15,344 km between Singapore Changi and Newark Liberty airport. The airlines claims by shifting to JFK International Airport would allow them to better accommodate a mix of passenger and cargo traffic on its services to New York in the current operating climate.
Singapore Airlines’s non-stop services to New York would also be supported by the growing number of transfer passengers who can now transit via Singapore’s Changi Airport.
SIA also anticipates significant cargo demand from a range of industries based in the New York metro area, including pharmaceuticals, e-commerce and technology firms.
The new service will provide the only non-stop air cargo link from the U.S. Northeast to Singapore, which serves as a regional distribution hub for many major U.S.-based companies.
Singapore Airlines will also be operating the route with a 3-class configuration Airbus A350-900 long-range aircraft. This aircraft is configured with 42 Business Class, 24 Premium Economy Class and 187 Economy Class seats.
Today, SIA operates non-stop services to Los Angeles.
It will continue to review its operations to the United States, and assess the growing demand for air travel amid the ongoing recovery from the Covid-19 pandemic, before deciding to reinstate services to other points in the country.
“Operating these flights between Singapore and New York’s JFK International Airport represent an important step in the rebuilding of our global network.
Non-stop ultra-long services are the bedrock of our services to the key U.S. market. We will continue to ramp up existing services and reinstate other points as the demand for both passenger and cargo services return.
Despite the challenging times for the airline industry, there are some early signs of optimism about a recovery in air travel.
Our customers say that they are increasingly confident about air travel, given the robust health and safety measures that are in place, as well as testing regimes to protect them and our staff.
This optimism is also driven by recent moves by countries such as Singapore, which are easing the restrictions on both transit and inbound passengers in a safe and gradual manner.”Lee Lik Hsin, Executive Vice President Commercial for Singapore Airlines
Resuming New York Services From A New Home
Details of the flight services are shown below:
|Flight||Flight Days||Departure Time*||Arrival Time*||Flight Time|
|SQ 24 SIN-JFK||Mon, Wed, Sat||225||730||18 hours 5 minutes|
|SQ 23 JFK-SIN||Mon, Wed, Fri||2230||0610 (+2 days)||18 hours 40 minutes|
Starting on 9 November 2020, flight number SQ24 will operate from Singapore Changi Airport to John F. Kennedy International Airport three-times weekly, and same return frequencies under SQ23 will be flown from 11 November 2020.
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