The company has seen its shares fall by 15 percent across the past week as travel hesitation grows. The carrier has also cancelled all of its flights to and from China until March. Employees have been offered unpaid leave with the opportunity to explore part-time work options.
The group – which also operates Swiss and Australian Airlines – has chosen to cut costs on staffing following the disruption.
A statement from the airline said: “In order to counteract the economic impact of the coronavirus at an early stage, Lufthansa is implementing several measures to lower costs.
“It is not yet possible to estimate the expected impact of current developments on earnings.”
Lufthansa will also be implementing a no-hire policy as it cancels flight attendant and other personnel training courses from April.
The company said people already on courses would not be hired, but it aimed to offer jobs to trainees who were adversely affected “in the long term”.
Lufthansa has been joined by KLM, the Dutch arm of Air France, in budget cuts to combat the outbreak of the deadly covid-19.
KLM announced they would be cutting back on the hiring of new staff and external consultants, as well as delaying new projects.
In an internal letter to management, Chief Financial Officer, Erik Swelheim, said: “The impact on KLM’s revenues will be very significant and will only partly be mitigated by lower costs and a lower fuel price.
“We urge you all to reduce your cost levels to a minimum level to ensure safe operations.
“Only ‘must-do’ expenditure is allowed.”
Lufthansa have said they will provide more details on the situation at its annual results press conference on March 19.
It will be presenting its fourth-quarter earnings and a more detailed update then.
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The group announced it has also grounded 13 of its aircraft.
It has slashed connections with Hong Kong in the face of reduced demand for flights.
The company added: “Additional frequency adjustments to and from Frankfurt, Munich and Zurich are planned.”
Lufthansa is being adversely affected by travel panic surrounding the coronavirus.
Parts of northern Italy, which are the group’s second-biggest foreign market, after the US, are under effective quarantine after a series of cases reported there.
Together with its partner airlines, Lufthansa serves 410 destinations.
In one month, December 2017, the airlines of the Lufthansa Group served approximately 9.3 million passengers.
A statement on the company website said: “The safety of passengers and employees is a top priority for the Lufthansa Group.
“After thoroughly evaluating all currently available information on the coronavirus, Lufthansa Group has decided to further suspend its Lufthansa, SWISS and Austrian Airlines flights to/from Beijing and Shanghai until March 28.
“The Lufthansa Group will continuously monitor the situation of the coronavirus and is in contact with the responsible authorities.
“Lufthansa Group offers free refund or rebooking for flights to/from mainland China.”
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