Lufthansa said Thursday it had walked away from talks with union Verdi over a package to cut staff costs and would only return to the negotiating table if Verdi offers significant labour cost savings. "We have decided not to continue the negotiations with Verdi for the time being," a Lufthansa spokeswoman said. "We do not see any progress at the moment." Verdi, which is negotiating on behalf of 35,000 Lufthansa ground staff, said the airline was demanding unreasonable pay cuts of up to 23% of employees' pre-tax salaries. "The refusal (to continue negotiations) is a slap in the face of the employees," Verdi deputy chairwoman Christine Behle said, adding that Lufthansa was demanding salary cuts without giving guarantees of job security. The union said it had offered up to E600m in staff cost cuts so far. Last week, the airline put German workers on notice of compulsory lay-offs, saying the slump in air travel and slow progress in union negotiations meant cuts were unavoidable after the carrier lost E1.7b in a single quarter. On Thursday, the airline said it was still willing to negotiate. "... we will return to the negotiating table when Verdi presents an offer with significant personnel cost savings," the spokeswoman said.<br/>
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Singapore Airlines and Cathay Pacific Airways will “inevitably” take a longer time to recover from the coronavirus crisis, an aviation consultant said. That’s because these carriers are based in markets with no domestic demand for flights, in a time where international travel is still very limited, said Joanna Lu, Asia’s head of consultancy at Cirium. Airlines have suffered massive losses since air travel was virtually halted when most countries shut their borders earlier this year, in a bid to stem the spread of the coronavirus pandemic. Both carriers saw profits turn to loss in their latest earnings report card. Lu said Wednesday that travel within a domestic or regional market is likely to resume more quickly, compared to long-haul flights to international destinations. “Those airlines that are serving a great scale of domestic market would probably gain more benefit from it, including carriers in China, Japan and maybe Indonesia,” she said. However, the opposite is true for Hong Kong and Singapore, where locals do not travel domestically by air due to the small land area. Lu also weighed in on reasons why the IATA in June said Asia Pacific is expected to post “the largest absolute losses” in 2020. She said the disruption to international travel has been the “major cause” of “negative progress” in the industry in Asia Pacific. Additionally, she said the region has many countries and markets, while Europe and the US have “pretty much been operating as a single, united domestic market.”<br/>
ANA Holdings is in discussions for 500b yen ($4.6b) in financing from the Development Bank of Japan as well as private financial institutions, Nikkei has learned, as the airline company braces for a prolonged plunge in passenger numbers amid the coronavirus pandemic. The Japanese airline, which has secured bank loans for the time being, is requesting DBJ, MUFG Bank, Sumitomo Mitsui Banking Corp. and Mizuho Bank to issue subordinated loans, which are considered similar to equity. ANA Holdings is looking to raise nearly 400b yen to 500b yen, though it has not settled on a figure. With a subordinated loan, if a company faces bankruptcy, that debt has a lower priority for repayment than other debt. In addition, when a company receives a subordinated loan, its financial condition is considered to have improved. This gives the company a greater ability to borrow from banks. ANA Holdings had secured about 1t yen in loans and credit lines by June. The airline goes through about 100b yen every month to lease aircraft and make interest payments. It expects to have enough operating funds for about a year. However, if passenger numbers continue to decline amid the pandemic, the airline's financial condition will deteriorate, potentially increasing costs when it issues corporate bonds and borrows from banks.<br/>