Lufthansa, German union agree €500m cost-cutting deal

Lufthansa has already warned that even with the state aid, thousands of jobs could be lost as travel demand is expected to stay below pre-pandemic levels for years. — AFP pic
Lufthansa has already warned that even with the state aid, thousands of jobs could be lost as travel demand is expected to stay below pre-pandemic levels for years. — AFP pic

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FRANKFURT, June 25 ― Lufthansa and German cabin crew union UFO said they clinched a deal yesterday that would result in €500 million (RM2.4 billion) in savings for the stricken airline, ahead of a crucial vote on the group's government-backed bailout.

The agreement, which still needs to be approved by UFO members, includes pay freezes, reduced flight hours, early retirement packages and unpaid leave for Lufthansa flight attendants to help Lufthansa weather the coronavirus-induced crisis plaguing the air industry.

“We want to avoid forced redundancies,” said Michael Niggemann, Lufthansa's human resources chief.

He said the cabin crew agreement “sent an important signal” less than 12 hours before an extraordinary general meeting at which shareholders will be asked to vote on a nine-billion-euro rescue plan for Lufthansa.

The package would see the German government take a 20-per cent stake in the airline.

But Lufthansa has already warned that even with the state aid, thousands of jobs could be lost as travel demand is expected to stay below pre-pandemic levels for years.

UFO spokesman Nicoley Baublies said the proposed cost-cutting measures would safeguard the jobs of 22,000 Lufthansa cabin crew members.

It “brings urgently needed job security” at a time of crisis, he said in the statement. ― AFP

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