The Lufthansa Group has revealed its detailed plan to increase profitability by focusing on optimization and integration between the various arms of its business. Unfortunately, in some areas, this will result in thousands of job cuts between now and the end of the decade, primarily in administrative roles.
- IATA Code
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LH
- ICAO Code
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DLH
- Year Founded
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1953
The news comes as the Cologne-headquartered German flag carrier and 
Star Alliance founding member presents its strategic plan, while also laying out fresh financial targets in the medium term. The job losses that form part of this renewed strategy will mark the airline’s biggest cuts since COVID-19.
Thousands Of Jobs To Be Cut By The End Of The Decade
In a statement released earlier this morning, the wider Lufthansa Group confirmed that it plans to cut around 4,000 jobs by 2030. The nature of these losses will be worldwide, although, as you might come to expect, most of the streamlining will take place in its home country of Germany. The roles set to be slashed are on the administrative side of Lufthansa’s business, rather than anything operational.
Lufthansa cites “developments and structural adjustments” as being the driving force behind the job cuts, with the German flag carrier noting that it “is reviewing which activities will no longer be necessary in the future.” Citing “the profound changes brought about by digitalization and the increased use of artificial intelligence will lead to greater efficiency in many areas and processes,” Lufthansa goes on to explain that:
“The company [has] reaffirmed its goal of adapting the Group’s organizational and operational structure in order to reorganize cooperation and responsibilities within the Group. The aim is to achieve closer and more networked cooperation between group functions and airlines in order to leverage synergies and increase efficiency.”
The Cuts Were Announced Internally Last Week
While today marks the first time that Lufthansa has publicly disclosed its plans to slash thousands of jobs by the end of the decade in order to optimize its operations and profitability, Reuters notes that some employees were told internally about the cuts as early as Friday. The German flag carrier has pledged that the process of cutting the roles from its roster “will be done in consultation with social partners.”
According to Reuters, Lufthansa told its investors that it would implement a turnaround following two profit warnings last year, with the carrier reportedly employing 7% more people than in 2019 despite operating fewer flights with a smaller fleet. As such, CEO Carsten Spohr is said to have told staff that “we cannot afford to maintain our work at the cost that we have now because we don’t have the margins to invest.“
The drastic nature of the job losses represents, as noted in reporting by Bloomberg, the German flag carrier’s steepest cuts since the onset of the COVID-19 pandemic at the start of the decade. Lufthansa has said that “digitalization, automation, and process consolidation” will allow it to make such reductions.
What Else Does Lufthansa’s Plan Entail?
While the drastic nature of the incoming job cuts at the Lufthansa Group will, of course, make the headlines on a human level, this move, in fact, only represents part of a much wider strategy that the German flag carrier hopes will increase its profitability. For instance, it wants to promote closer integration between its network airlines (Austrian Airlines, Brussels Airlines, ITA Airways, Lufthansa, and SWISS).
This, it says, “will clarify responsibilities, promote collaboration, and speed up decision-making processes,” while also increasing efficiency and productivity. A key part of this will be a fleet modernization program, which will see the group’s airlines receive 230 jets (including 100 long-haul planes) by 2030.
Elsewhere, the Lufthansa Group plans to develop Eurowings as a point-to-point airline following a successful restructuring program, as the low-cost carrier integrates 40 brand-new narrowbodies from the Boeing 737 MAX family. On the whole, the group has set new medium-term financial targets, as it aims for an adjusted EBIT margin of 8-10% and adjusted free cash flow of over €2.5 billion ($2.93 billion) a year.
