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State aid talks at Lufthansa: pilots offer waiver of salary

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Negotiations on billions in government aid for Lufthansa, which was heavily burdened by the corona crisis, are ongoing. In government circles on Friday there was talk of ongoing talks. As the German press agency had already learned, it is about a rescue package in the amount of nine to ten billion euros.

According to a report by the "Spiegel" a good half of it – 5.5 billion euros – should flow as a silent participation. The federal government is demanding a direct stake of 25.1 percent in the Dax Group and a guaranteed dividend of nine percent. In addition, the state development bank KfW should provide 3.5 billion euros. The government vouches for that. Neither the Ministry of Finance nor Lufthansa wanted to comment on the report.

Lufthansa boss Carsten Spohr had recently warned of excessive influence on the state by his company. It is very difficult to control a group if several governments want to influence operational business tasks, Spohr told the weekly newspaper "Die Zeit". Instead of directly entering the state, Lufthansa is also examining self-administered bankruptcy.

The group could save money on salaries. The pilots of Lufthansa offer the company a voluntary waiver of salary until the summer of 2022. According to a message from Thursday, the requirement to waive bankruptcy is self-administered. Such a protective shield procedure does not meet the requirements to overcome the crisis in a social partnership, the union Cockpit (VC) said.

The offer includes a salary reduction of up to 45 percent for the more than 5000 active pilots in the group collective agreement and has a total volume of 350 million euros. It also included a further, short-term reduction in short-time benefits. With the agreement of the union, the cockpit costs have already been reduced by more than 50 percent.

In the event of self-administered bankruptcy, company pensions and transitional allowances would be up for grabs because the Group could try to get rid of the pension obligations. It could also be easier to terminate collective agreements and layoffs. To date, Lufthansa has spoken of a staff overhang of around 10,000 employees for the entire group, but at the same time has set the goal of wanting to keep as many employees as possible in the company.

Lufthansa airlines currently only fly around 1 percent of the usual program because of the corona restrictions. Despite massive short-time working, many fixed costs continue, so that the company loses around one million euros in cash every hour and the cash reserves of more than 4 billion euros melt. Interest and unfavorable kerosene contracts, which had assumed that the price of oil would be much higher than the current one, are a burden.

The aviation industry has been hard hit by the corona pandemic. Other airlines are also trying to overcome the crisis with savings programs, for example. But jobs are also on the brink. The Irish low-cost airline Ryanair expects to cut up to 3,000 jobs due to the crisis. The airline will begin a restructuring program in July, Ryanair said on Friday.

Pilots and cabin personnel are particularly affected by the job cuts. Unpaid forced leave, cut wages by up to 20 percent and the closure of locations across Europe are also expected, the release said. Management and administrative staff should also face job loss and cut wages. Ryanair CEO Michael O'Leary agreed to cut half of his salary for the full budget year.


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. (tagsToTranslate) Coronavirus (t) Lufthansa

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