Coronavirus: ‘Demand won’t return quickly’, warns Lufthansa chief

There will be no rebound this summer to pre-crisis levels of demand and no quick return to business as usual, Lufthansa Group head Carsten Spohr has warned.

Lufthansa chief executive Spohr gave a sharp analysis of the situation facing major carriers in a conference call on Thursday.

But he warned: “It will take a long time before we see these [pre-crisis demand] levels again.”

Spohr said: “There will be no normal business development. Lufthansa won’t return to the old status and continue flying as usual.

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“We are in a better financial position than most of our competitors. Unlike other airlines we own a big majority of our fleet. But a crisis of such dimensions can only be overcome with contributions from other stakeholders.

“We will further reduce our capacity and address our liquidity. We also plan for after the crisis – [for] what size Lufthansa Group will be and what role European aviation will play.

“Will travel behaviour change or will there be pent-up demand?”

Spohr insisted: “It is unimaginable not to envision structural changes in aviation.”

He said: “Currently, we offer only 20% of our short-haul flights and 10% of long distance. Even this schedule will become obsolete.

“We have no incoming bookings anymore.

“Intercontinental flights will stop almost completely. Only 5% will operate, orientated towards the return of German and Swiss citizens.

“Frankfurt will remain our only hub. Our Munich mainline flights will stay on the ground completely.

“As of next week, from Frankfurt we will offer 30 flights a day.

“We agreed with the unions to introduce short-hour work. The more we can do it, the more colleagues can stay on board.”

The group has put 31,000 employees on short-time working for up to 12 months.

Spohr said: “Employees ask all the time ‘How long can Lufthansa continue?’ I can only say that we will stay longer than our competitors.

“Our balance sheet is strong and our indebtedness much lower than most of our competitors.

“Should the situation not improve, we need to talk about the basic supply of flights from a political point of view because from a commercial point of view flights will not make sense anymore.

“We talk intensively with the government, including on action to safeguard liquidity.

“Payments should be postponed. Air passenger [compensation] regulations need to be flexible because we can’t compensate for the deletion of flights due to coronavirus.”

Spohr insisted: “It is not business as usual. I’m not a pessimist, but what happens now will reduce the size of the world economy. Lufthansa Group as a result will shrink.

“We need to think about the future of European aviation within global aviation. We need to talk to national governments and to the EC about what role we want European champions in global aviation to play in future.”

Asked about state aid to carriers, Spohr said: “If we take out big loans, airlines stand no chance of survival. We will have talks about different forms of support, maybe even state aid. But it’s too early to give answers.

“First, we focus on conserving cash.

“The [German] government is very clear that it will help if there are liquidity problems.

“We have a three-month scenario for grounding. Once we restart, flights won’t be full overnight. You need booking room. It will start slowly.

“We don’t plan only to the end of May but for 12 months. I don’t expect any passenger development.”

For the summer season, he said: “I would be happy just to know we can start flying again. It would not be a full schedule, just a special schedule.

“We will need to get our customers back and then rebuild our industry.

“We will keep some aircraft ready to fly if restrictions are lifted. But usually we handle 280 passengers a minute. It will take a long time before we see these levels again.”

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