Lufthansa Group will close its Germanwings low-fare subsidiary and accelerate the consolidation of its Eurowings unit into a single operating entity as part of a sweeping restructuring prompted by the Covid-19 pandemic, the company announced Tuesday. The German group cited projections for a “significant” decline in air travel even after the coronavirus crisis subsides as the primary rationale for a permanent capacity reduction to affect almost all its flight operations.
Fleet cuts include the permanent decommissioning of six Airbus A380s, seven A340-600s, and five Boeing 747-400s at Lufthansa Airlines. Although it had already scheduled the sale of the A380s to Airbus in 2022, the A340 and 747 retirements will lead to the overall reduction of capacity at its hubs in Frankfurt and Munich. Separately, Lufthansa will withdraw 11 Airbus A320s from short-haul operations, while regional subsidiary Lufthansa CityLine will withdraw the three A340-300s it has operated since 2015 to long-haul tourist destinations.
Eurowings, meanwhile, will see cuts in both its long-haul and short-haul businesses, including the phase-out of another 10 Airbus A320s. Last June Lufthansa announced that Eurowings would close several bases, focus on short-haul operations aboard Airbus A320-family aircraft, and temper annual capacity growth until 2022 to just 1 percent as part of a major overhaul primarily targeting its long-haul network.
Lufthansa also said restructuring programs already begun at Austrian Airlines and Brussels Airlines will further accelerate, as both companies work to reduce the size of their fleets. Swiss International Air Lines will also adjust its fleet size by delaying deliveries of new Airbus A320neos and consider early retirements of older aircraft.
Finally, the Lufthansa Group airlines have already terminated almost all wet-lease agreements with other airlines.
“The aim remains the same for all employees affected by the restructuring measures: to offer as many people as possible continued employment within the Lufthansa Group,” said the company in a statement. “Therefore, talks with unions and workers councils are to be arranged quickly to discuss, among other things, new employment models in order to keep as many jobs as possible.”