Lufthansa Cargo has downsized its executive team from 4 to 3. The victim is the finance department previously managed by Martin Schmitt, which will in future be distributed across the
shoulders of the three remaining Executive Board members, Peter Gerber (CEO), Dorothea von Boxberg (Sales and Product), and Harald Gloy (Operations).
The downsizing of the leadership team is a result of the updated cost-cutting measures imposed by the Lufthansa Board of Directors and announced today (07JUL20). These measures affect all group
members and subsidiaries and are aimed at reducing costs, enabling the carrier to become competitive again.
For Lufthansa Cargo, the restructuring program demands the axing of 500 jobs by 2023, bringing employee numbers down from currently 4,500 to 4,000. This will mainly be achieved through natural
attrition, age-related retirements, and recruitment freezes, says the Head of Communications, Andreas Pauker. Whether additional redundancies are necessary beyond these measures to push costs
down further remains to be seen and will be monitored consistently, he states.
As for former CFO, Martin Schmitt: he has meanwhile been integrated into the finance department of Cargo parent, Lufthansa Passage Airline, where people who calculate with a sharp pencil are
This, because the updated restructuring program dubbed “ReNew” goes far beyond the first set of measures announced in early April, aimed primarily at reducing the airline’s future fleet by taking
100 aircraft out of operations. Headed by Detlef Kayser, Member of the Lufthansa Group Executive Board, “ReNew” follows the approval by the airline’s shareholders of the German government’s cash
injection totaling up to 9 billion euros to prevent Lufthansa from going bankrupt, backed by financial commitments made by Austria and Switzerland to secure the existence of Lufthansa Group
members AUA and Swiss respectively.
These are the “ReNew” bullet points:
- The executive boards and management bodies of all Lufthansa subsidiaries will be reduced in size. In a first step, this affects Lufthansa Cargo (as described above), the LSG Group, and
Lufthansa Aviation Training. The decision is based on the downsizing of the Executive Board of Lufthansa from formerly 7 to 5 members.
- The number of leadership positions will be reduced by 20% throughout the Group.
- 1,000 jobs will be axed in administration departments throughout the Group.
- Transforming the Lufthansa Airline into a separate corporate entity will be sped up with the aim of building a holding structure.
- Subsidiary fleets will be reduced, flight operations bundled, aimed at streamlining the long and short-haul leisure business at FRA and MUC. At Lufthansa alone, 22 aircraft have already been
phased out ahead of schedule, including six Airbus A380s, eleven Airbus A320s and five Boeing 747-400 jetliners.
- Last but not least, the financial forecast for 2023 provides for renewing the fleet by max 80 new aircraft into the Lufthansa Group carriers’ fleets. This will reduce the investment volume
for new aircraft by half.
Fiege to handle Lufthansa Cargo shipments in FRA
Furthermore, the top management assures to avoid layoffs wherever possible. However, “this requires agreements on crisis-related measures with unions and social partners representing the
Lufthansa employees,” states the release.
In a separate move, Lufthansa Cargo said that “Fiege Air Cargo Logistics”(FACL) will take over the operative handling and co-ordination of inbound and outbound standard shipments at its Cargo
Center at Rhine-Main Airport in several phases until mid-2021. The physical cargo handling processes in the LCC had already been largely outsourced to various external service providers for many
years, the carrier states.
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