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Lufthansa Posts Q2 Loss, Warns On H2, FY20 Earnings; To Cut 22,000 Jobs

German airline Deutsche Lufthansa AG (DLAKF,DLAKY) reported Thursday that its second-quarter consolidated net loss was 1.5 billion euros, compared to previous year's profit of 226 million euros.

Adjusted EBIT was a loss of 1.7 billion euros, compared to prior year's profit of 754 million euros, despite extensive cost reductions. Operating expenses were reduced by 59 percent.

Meanwhile, the logistics division benefited from stable demand, and Lufthansa Cargo's Adjusted EBIT was 299 million euros, compared to previous year's loss of 9 million euros.

Revenues plunged 80 percent to 1.9 billion euros from last year's 9.6 billion euros due to the collapse in demand for air travel amid the Corona pandemic. Most of the revenue, of 1.5 billion euros, was generated by Lufthansa Cargo and Lufthansa Technik.

In the second quarter, Lufthansa Group airlines carried 1.7 million passengers, 96 percent fewer than in the previous year. Capacity fell 95 percent. The seat load factor was 56 percent, 27 percentage points below the previous year.

In July, the Group gradually increased its offering to around 20 percent of the previous year's level.

In the third quarter, capacity offered is planned to increase to an average of around 40 percent of the prior year capacity on short- and medium-haul routes and to around 20 percent on long-haul routes.

The company plans to return to 95 percent of the short- and medium-haul and 70 percent of the long-haul destinations by the end of the year.

Further, Lufthansa expects a clearly negative adjusted EBIT in the second half of 2020 and thus a further significant decline in adjusted EBIT for the full year.

The company said it currently expects demand for air travel to return to pre-crisis levels in 2024 at the earliest.

Lufthansa has therefore decided on a comprehensive restructuring programme entitled "ReNew", which includes the reduction of 22,000 full-time jobs in the Lufthansa Group.

The Group's fleet is to be permanently reduced by at least 100 aircraft. Nevertheless, the capacity offered in 2024 is to correspond to that of 2019.

The size of the Executive and Management Boards of the Group companies will be reduced and the number of executives will be lowered by 20 percent.

In the administration of Deutsche Lufthansa AG, 1,000 jobs will be cut.

Lufthansa Group currently has 129,400 employees, about 8,300 fewer than at the same time last year.

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