Lufthansa is preparing to unveil several thousand job cuts on Monday during its first company-wide capital markets day in six years, as Europe’s largest airline by sales seeks to reassure investors of its efficiency drive, two sources close to the matter told Reuters.
Shares in Lufthansa (LHAG.DE) rose as much as 3.4% on Friday — their highest level in more than three weeks — after Reuters first reported the planned cost-cutting measures. The stock was last up 1.7% at 1423 GMT.
The German airline has faced mounting criticism from analysts and investors over its inability to rein in expenses and expand its core business. Lufthansa had postponed a target of achieving an 8% operating profit margin by 2025, after issuing two profit warnings in 2024. Earlier this year, management pledged to launch an ambitious turnaround plan.
“All this will require us also to become leaner in admin because we cannot afford to maintain our work at the cost that we have now,” Chief Executive Carsten Spohr told staff during a recent town hall, excerpts of which were seen by Reuters. “And in our industry, without modern technology, you have no chance.”
While the airline aims to reduce its administrative workforce by around 20%, the exact number of redundancies has yet to be finalised, sources said. Any job cuts would extend across the group, not just its flagship airline, according to a third person familiar with the talks.
Labour unrest remains a major challenge for the company. An ongoing dispute over pensions and the possibility of a pilot strike threaten to overshadow Monday’s investor event in Munich. Lufthansa has so far declined to comment on the planned restructuring.
Despite a smaller fleet and less flying activity compared with 2019, the company employs 7% more people today, according to a note from Bernstein. Investors are expected to push for proof that Lufthansa can streamline operations and modernise its business.
The airline’s strategy partly depends on building up its two newer German carriers — Discover and City Airlines — where labour contracts are more flexible than those of Lufthansa Classic. Executives told Reuters that greater flexibility would allow the group to shift resources away from higher-cost subsidiaries.
“Analysts may also look for assurance that Lufthansa is still on track for its 2025 guidance for a significant increase in adjusted EBIT,” said Ruairi Cullinane, an analyst at RBC.
