EMO 50th Anniversary Ad
FlyingTypers Logo
40th Anniversary Ad
   Vol. 15  No. 47
Monday June 20, 2016

Lufthansa Cutbacks Tip of the Iceberg

Lufthansa Cutbacks Tip Of The Iceberg

Flying Typers Exclusive—News headlining the woes of Lufthansa recently has detailed one challenge after the other for the past 18 months as share prices for the airline have suffered.
     For the past 18 months, Lufthansa’s woes have littered the news with one challenge after another, and as a result share prices for the airline have suffered.
     Lufthansa has been the target of almost non-stop strikes and walkouts. The catastrophic crash of a Germanwings airplane (now Eurowings, the daughter of Lufthansa) due to a mentally unstable pilot didn’t help matters.
     Last year brought the longest strike (7 days) in Lufthansa's six decades.
     Add to that unsettling and recurring executive turnovers, including several defections to other airlines and industries (most notably Simone Menne, who suddenly and without warning left her job as the airline CFO earlier this month), and cryptic announcements by the airline, and the result is a shared concern about the long-term vitality of Lufthansa Cargo.
     As everyone learned that Lufthansa Cargo would axe 800 jobs out of a workforce of 4,600 in September, the unspoken fear is that these layoffs may just be the tip of the iceberg.
     FlyingTypers spoke to people close to the action who shared some views under cover of anonymity.
     “It is highly unlikely that even with the labor cutbacks announced, Lufthansa Cargo will continue in its current form,” said a source close to the airline.
     “Financial gymnastics can only take you so far.
     “And one more rebooting program floated out to the market will not suffice,” the source added.
     Lufthansa Cargo’s austerity program tagged C40 aims to reduce spending on personnel and services by €40 million annually.
     The source continued, “Lucky if C40, based on the reaction of the market, doesn’t end up like runaway C4, blowing up after what may be changing too little, too late, at Lufthansa Cargo.
     “Long term, Lufthansa Cargo needs a sustainable business plan that recognizes market conditions, and that could include, for example, moving away from the big freighter fleet, especially the MD11Fs,” the source added.
     “They (Lufthansa) apparently have not come to that moment of truth just yet.
     “Lufthansa Cargo should also consider that immersing itself into a string of joint ventures, alliances, and shared services everywhere—while saving money—could also have the net result of a loss of identity.
     “The recent open hostility between Air France and KLM should be warning enough that once things go south, it is near impossible to ever get back the cache of greatness that once surrounded a service as esteemed and well regarded as Lufthansa Cargo,” the source said.
     Some others are even less positive.


     A GSA in FRA told FlyingTypers:
     “Forget the once famous Lufthansa Cargo standard and training—that doesn’t exist anymore.
     “Just compare service levels and customer experience with the competition today, and have a good, hard look at how much money per employee these other players spend and what they expect.”
     FlyingTypers also spoke to current and retired Lufthansa Cargo employees and most confirmed the rough gist of the aforementioned statements.
     One retired source said, “Lufthansa threw the baby out with the bath water.
     “Part of the cost-cutting programs included sending the ‘know how’ into early retirement because they wanted to get rid of the long-time staff with higher salaries.
     “They replaced them with less experienced and lower salaried newcomers who then tried to reinvent the wheel, as all the expertise was gone.
     “Also handling was outsourced to handling agents with little or no quality control.
     The source continued, “You cannot win if you only apply cost-cutting measures but never put into place workable plans to increase sales, customer service, and quality.”
     “Many of the people who developed our standards and procedures and who had formerly been with German Cargo when Lufthansa acquired that company are long gone,” another source said.
     “The pride in our brand and reputation has diminished, and with the latest round of layoffs it will be difficult for Lufthansa management to get any form of contribution or cooperation from employees at all, especially after Lufthansa announced on May 13 that they want to terminate protection for long-time employees.
     “After all, why should we work for a better future at Lufthansa Cargo if we have none?
     “If management continues this way, Lufthansa Cargo’s days are numbered,” the source said.
     FlyingTypers leaves the last word to a major multi-modal international freight forwarder, who said of Lufthansa:
     “Any service provider who replaces their dedicated, committed, long-term workforce with outside rented people is doomed and will lose loyal customers as well as a loyal workforce.
     “Ground personnel for an airline is as important as the flying teams.
     “Lufthansa is doing this for cost saving reasons—on the cargo as well as passenger side— but it is a slippery slope, and if it isn’t stopped, the downturn will gain speed to the point of no return.
     “But I’m sure the boys with the corner offices have it all figured out and will float on top of any disaster,” the forwarder concluded.

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
Access complete issue by clicking on issue icon or
Access specific articles by clicking on article title
FT051816Vol 15. No. 44
Delta Joyce Is All About Choice

Sounds of Silence
Chuckles For June 8, 2016
Still A Thrill
One Roof Still At Home
The Champ Comes Home
Vol 15. No. 45
Mass Layoffs At Lufthansa
Airport Truck Queues Threaten Cargo Growth
Chuckles For June 13, 2016
Air Cargo News For June 13, 2016
Atlanta Activates Truck Staging
It's JFK Cargo Golf Day June 27

Vol 15. No. 46
Delta Up On Pharma
Kuehner Panalpina End To End
Chuckles For June 15, 2016
The Conversation Continues
Around The World Following The Sun
Orlando The Next Night

Publisher-Geoffrey Arend • Managing Editor-Flossie Arend •
Film Editor-Ralph Arend • Special Assignments-Sabiha Arend, Emily Arend • Advertising Sales-Judy Miller

fblogoSend comments and news to geoffrey@aircargonews.com
Opinions and comments expressed herein do not necessarily reflect the views of the publisher but remain solely those of the author(s).
Air Cargo News FlyingTypers reserves the right to edit all submissions for length and content. All photos and written material submitted to this publication become the property of All Cargo Media.
All Cargo Media, Publishers of Air Cargo News Digital and FlyingTypers. Copyright ©2016 ACM, Inc. All Rights Reserved.
More@ www.aircargonews.com

recycle100% Green