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* Lufthansa's worst quarterly loss in its 65-year history
* Does not see air travel at pre-crisis levels before 2024
* Says can no longer rule out forced German lay-offs
(Recasts, adds details from analyst call, shares)
By Caroline Copley and Ilona Wissenbach
BERLIN, Aug 6 (Reuters) - Lufthansa put German
workers on notice of compulsory lay-offs on Thursday, saying
tumbling air travel and slow progress in union negotiations
meant cuts were unavoidable after it lost 1.7 billion euros ($2
billion) in a single quarter.
The German airline, which secured a 9 billion euro state
bailout in June, flew just 4% of prior-year passengers between
April and June as a result of the COVID-19 pandemic and expects
capacity to increase to only around 50% by the end of the year
and two-thirds of last year's level in 2021.
Its outlook is more pessimistic than rivals such as Air
France-KLM, which expects to fly 80% of its pre-crisis
flights next year, and British Airways and Iberia owner IAG
, which forecasts capacity to be 24% lower in 2021.
Tentative signs of a European recovery have been undermined
by new localised outbreaks and restrictions, while long-haul
flights such as to the United States - which are important for
Lufthansa - remain largely grounded due to rising infections.
Lufthansa Chief Executive Carsten Spohr said on Thursday he
does not expect demand for air travel to return to pre-crisis
levels until 2024, echoing a forecast last month by the
International Air Transport Association (IATA).
The airline, which has already announced plans to cut 20% of
its leadership positions and 1,000 administrative jobs, said it
had run out of patience in talks with unions.
It aims to reduce 22,000 full-time jobs and said it had
8,300 fewer employees by the end of June, due mainly to people
leaving jobs at its catering business and non-German businesses,
which include Swiss, Austrian Airlines and Brussels Airlines.
BRIGHT SPOT
The sharp drop in passenger numbers pushed Lufthansa to a
quarterly adjusted operating loss of 1.7 billion euros, the
worst performance in its 65-year history.
That was 300 million euros lower than the average analyst
forecast in a company-compiled consensus, boosted by a strong
performance in its cargo business which gained from a shrinkage
in global air freight capacity.
Lufthansa plans to cut capital expenditure to 1.3 billion
euros this year and next, below the levels of Air France-KLM and
IAG.
And it expects to burn through around 400-500 million euros
in cash per month for the rest of the year and hopes to get back
to positive free cash flow in the course of 2021.
Bernstein analysts described the results as "the first step
on a long journey back." Shares were down 1.7% at 1010 GMT.
($1 = 0.8432 euros)
(Reporting by Caroline Copley and Ilona Wissenbach; Editing by
Maria Sheahan and Alexander Smith)
