German airline Lufthansa announced Wednesday that it will freeze its hires and offer unpaid leave to its employees to " cope with the economic effects of the coronavirus " as the epidemic continues to progress. " Lufthansa is implementing several cost reduction measures " explains the group in a press release, however, specifying that " the effect on the results of the current situation is not yet assessable ".
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The Covid-19 epidemic continues to advance outside of China, particularly in Europe. Lufthansa is adding to a growing list of companies warning that their business is affected by coronavirus which disrupts supply chains and drives demand, particularly in Asia. Lufthansa has notably canceled until March 28 its 54 weekly connections between Germany, Switzerland and Austria on one side and mainland China on the other. If flights with Hong Kong are maintained, " the current demand situation " has led the company to " adjust capacity, " said the group in a statement. " From an accounting point of view, 13 long-haul aircraft of the Lufthansa group are currently grounded, " added the company. New hires are now " evaluated, suspended or postponed to a later date " and " Lufthansa is now offering its employees unpaid leave ," said the company.
The training courses planned from April 2020 will not be provided and current apprentices will not be taken up even if the " objective " remains " long-term " hiring. The administrative budget is reduced by 20% and " the volume of projects " by 10, adds the group. In mid-February, the International Civil Aviation Organization had already warned that the new epidemic could lead to a drop of $ 4 billion to $ 5 billion in revenues for global airlines. On the Frankfurt Stock Exchange, the title of Lufthansa was down -3.01% to 12.90 euros in a Dax down -1.6%. Since the beginning of the week, the group has fallen by almost 13% against the backdrop of investor panic over the new coronavirus. The Dax has fallen by more than 7% since Monday.
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