Lufthansa (LHAB) (LHA) confirmed a new deal with trade union Verdi to cut €200 million in expenses for employment protection.
After months of negotiation, the agreement was reached on November 11, 2020. It will mainly affect the ground staff of Deutsche Lufthansa (LHAB) (LHA), Lufthansa Technik and Lufthansa Cargo. Workers will have to give up part of their wages and will be protected against layoffs until the end of March 2022.
According to Lufthansa (LHAB) (LHA), 24,000 ground staff would not receive their Christmas and vacation bonuses in 2020 and 2021. The company will also reduce the amount of top-up payments to staff working short-time. These measures should cut personnel costs by 50%.
Lufthansa (LHAB) (LHA) promised to not make any forced lay-offs in 2021 and to offer partial retirement and voluntary redundancy programs.
The largest German airline reported an operating loss of €1.26 billion in the third quarter of 2020 and has warned to cut 30,000 jobs as its winter schedule is at extremely low levels. The company warned that it would burn even more cash through the fourth quarter of 2020.
“With this crisis package, we have taken a first important step towards reducing ground staff personnel costs and can avoid forced redundancies for 2021,” Lufthansa’s (LHAB) (LHA) HR head Michael Niggemann said in a statement. “However, we cannot slow down our efforts in continuing to work on crisis-management measures after short-time work ends.”
Talks on personnel costs reductions will continue after January 1, 2021, when the short-time work compensations will no longer apply.
The deal still requires a vote from Verdi union members. Verdi is the second largest German trade union and it has been accusing Lufthansa (LHAB) (LHA) of trying to cut jobs after receiving €9 billion government bailout.
On November 11, 2020, the Vereinigung Cockpit union representing Lufthansa (LHAB) (LHA) pilots offered to extend their current deal to cut costs until June 2022.