Investor Alert

Feb. 26, 2020, 6:11 a.m. EST

Lufthansa makes cuts to brace for coronavirus

Watchlist Relevance

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

or Cancel Already have a watchlist? Log In

By William Boston

BERLIN -- Deutsche Lufthansa AG, Germany's flagship airline, said it would cancel projects and slash costs and expenses, one of the first signs that the global airline industry is beginning to brace for the impact of the coronavirus epidemic.

The airline had previously canceled all Lufthansa, Swiss and Austrian Airlines flights to and from China, where the virus emerged, until March 28 in a move to help stop the pathogen from spreading.

With the epidemic now rapidly spreading to other parts of the world, including sizable outbreaks in South-Korea, Japan, Iran and Italy, airlines outside of Asia are expecting to take a bigger hit to sales and earnings.

The German carrier said it would begin cutting expenses in administration, and cancel some projects in the pipeline. A spokesman for the company said no jobs were on the line so far, but Lufthansa is offering employees to take unpaid leave effective immediately.

"In the administrative areas, the core brand Lufthansa will reduce its project volume by 10% and the budget for material costs by 20%," it said.

Lufthansa is also reviewing options for part-time work and said it is reassessing, suspending or deferring new hires for its airline for now.

Additionally, the company said scheduled training for attendant and station personnel scheduled from April 2020 is canceled.

"It is not yet possible to estimate the expected impact of the current developments on earnings," the company said, adding that it would comment further on March 19 when reporting annual results.

Capacity adjustments were also made to the flight schedule to and from Hong-Kong, and frequency adjustments to and from Frankfurt, Munich and Zurich are planned, the airline said.

"In purely mathematical terms, 13 Lufthansa Group aircraft are currently on the ground," it added.

Write to William Boston at william.boston@wsj.com

This Story has 0 Comments
Be the first to comment
More News In

Story Conversation

Commenting FAQs »
Link to MarketWatch's Slice.