Lufthansa Group is to “advance” restructuring after third quarter income fell to a €2 billion loss as the global Covid-19 crisis continued to hit airline demand.
The average monthly operating cash drain in the period came in at €200 million as sales fell from €10.1 billion a year earlier to €2.7 billion.
Net income dropped €2 billion into the red against a €1.2 billion profit in the equivalent three months in 2019.
The operating cash drain is set to rise to €350 million a month in the current quarter.
“The global corona pandemic continued to have a considerable impact on the Lufthansa Group’s earnings development in the third quarter,” the company said.
“However, compared to the second quarter, losses were reduced due to substantial cost savings and an expansion of the flight schedule in the summer months of July and August.”
Operating expenses were cut by 43% in the third quarter, partly as a result of “significantly lower” fuel costs, fees and a reduction in other outgoings that vary based on the extent of flight operations.
“Using short-time work for a large portion of the personnel in combination with other measures resulted in a reduction of fixed costs by more than a third. In addition, strict liquidity management limited the cash outflows,” the group added.
The group has liquidity of €10.1 billion available, including €6.3 billion in unutilised state aid measures.
Chief executive Carsten Spohr said: “Strict cost savings and the expansion of our flight programme enabled us to significantly reduce the operating cash drain in the third quarter, compared to the previous quarter.
“Lufthansa Cargo also contributed to this with a strong performance and a positive result of €169 million.
“We are determined to keep following this path. We want to return to a positive operating cash flow in the course of the coming year.
“In order to achieve this, we are advancing restructuring programmes throughout the group with the aim to make the Lufthansa Group sustainably more efficient in all areas.”