Covid-stressed Lufthansa throws out 103 Indian staff for seeking job assurance
Some of the Lufthansa employees whose services were terminated had been working with the airline for over 15 years
Covid-stressed German flag carrier Lufthansa has terminated the services of 103 of 135 of its flight attendants based in India, some of whom had been with the airline for more than 15 years.
These employees had been working on a fixed-term contract and were offered leave without pay (LWP) for two years by the airline, which had copped a massive financial blow as a result of the Covid-19 pandemic, and decided to take the path of restructuring, according to reports. The fault of the employees: they had asked for job assurance after the completion of the LWP period.
"Lufthansa regrets to confirm that it will not be extending the fixed-term employment contracts of its Delhi-based flight attendants. The severe financial impact of the coronavirus pandemic leaves Lufthansa (with) no choice but to restructure the airline. This includes personnel-related measures in Germany and Europe as well as in key international markets like India," the airline said in a statement.
The airline added that it had been going through a cash burn of several hundred million euros every month, which made it necessary for the airline, like its peers worldwide, to take steps to secure its future. Lufthansa said that it must plan to operate with 150 fewer aircraft in the long run (by 2025), and therefore, the cabin crew numbers in all its markets are bound to be affected. It pointed out that even now, low demand for international air travel resulting especially from government restrictions has left cabin staff with little or no work.
A Lufthansa Airbus A330-300. Image courtesy: Wikimedia Commons/TJDarmstadt
India had imposed a ban on scheduled commercial international air travel from March 23, 2020, to prevent the spread of the coronavirus. The country went under a strict lockdown from March 25. International travel was started in a limited way by the Indian government under the Vande Bharat Mission (VBM) in May to repatriate stranded people and under bilateral air bubble arrangements from July giving carriers of India and its partner countries reciprocal rights to operate flights either way. India and Germany inked an air bubble agreement in July itself. The ban on regular international air travel in India has, however, been extended till February 28, 2021.
A hard lockdown was imposed in Germany in December 2020, which now would be in force till March 7, 2021, DW reported. Since January 24, more than 20 countries have been subjected to stricter rules for entry into Germany. These are 'high-risk areas', where the incidence value has been more than 200 new infections per one lakh inhabitants within seven days. Czech Republic, Spain, Portugal, Egypt, the US and Israel were some of these countries that had been put under this category. Since January 30, strict restrictions were put on entry from countries where the particularly infectious variants of the coronavirus had spread rapidly. According to the Robert Koch Institute, Germany considers India as a 'risk area'.
According to a Reuters report in November 2020, Lufthansa booked a net loss of 2 billion euros ($2.4 billion) in the third quarter as compared to a profit of 1.2 billion euros the previous year. What was worse, the airline had predicted that it would burn through more cash in the fourth quarter of 2020 than the third quarter, making restructuring inevitable. This was necessary to maintain Lufthansa's "competitive advantage", the airline's Chief Executive Carsten Spohr had said.
Third-quarter capacity was down to just 22% of that in 2019. As a result, the average monthly cash drain stood at 200 million euros. The airline had said that it expected to return to a positive operating cash flow in 2021. The airline had said that it was looking to cut 22,000 full-time jobs, though the size of the restructuring would depend upon negotiations with trade unions. Lufthansa got a nine billion euro state bailout in June 2020.
Spohr had pointed out that in just 65 days, Lufthansa was set back almost 65 years, with the number of flights running per day falling to post-war levels, when Lufthansa was founded, the BusinessWire reported in June 2020. As flights were grounded in the wake of Covid-19, the incoming cash was minimal, while the outgoings were high.
Reuters reported in December 2020 that Lufthansa and its pilots had reached a deal that secures jobs until the end of 2022 and could result in cost-reduction by 450 million euros.
"We had signed an agreement with the Indian union providing for two years of unpaid leave with Lufthansa continuing to provide the local health insurance even for enrolled family members. Unfortunately, consent to the agreement was revoked by the union on December 31. Indian cabin crew with unlimited contracts are not affected as Lufthansa was able to reach individual agreements with these flight attendants," the airline stated.
Lufthansa had to shut down Germanwings partly as a result of Covid-induced stress. Image courtesy: Wikimedia Commons/Pasci23456
An affected employee, however, complained that the airline was unwilling to assure them that there would be no termination after the two-year LWP period, Business Standard reported. The employees were sacked "without notice". The employee quoted by the daily pointed out that no such terminations happened in Germany.
Lufthansa's India operations have not been smooth during the Covid times, despite an air bubble being in place between India and Germany. The airline had cancelled all flights between the two countries from September 30 to October 20 last year after the Indian authorities rejected the airline's planned schedule for October.
The Indian civil aviation regulator, the Directorate General of Civil Aviation (DGCA), however, clarified India's position. It tweeted, "There are restrictions in place for Indian nationals desiring to travel to Germany which was putting Indian carriers at a significant disadvantage resulting in inequitable distribution of traffic in favour of Lufthansa."
The DGCA added, "As against Indian carriers operating 3-4 flights a week, Lufthansa operated 20 flights a week. In spite of this disparity we offered to clear 7 flights a week for Lufthansa which was not accepted by them."
Lufthansa and its subsidiaries Eurowings, Swiss, Austrian and Brussels Airlines had slashed their schedules, fleet and staff, with air travel not expected to recover to pre-pandemic levels before 2025, Reuters reported.
Lufthansa, which owns national airline brands in Germany, Austria, Switzerland and Belgium, had ceased the operations of its budget regional subsidiary Germanwings in April 2020 partly in the wake of the travel ban imposed in response to the coronavirus crisis.
The Cologne-based Germanwings functioned as Lufthansa's low-cost carrier till October 2015 when the Germanwings brand was replaced by Eurowings. Since 2016, Germanwings had been flying as a wet-lease operator for Eurowings.
(Cover Image courtesy: Wikimedia Commons/www.airliners.net)