Lufthansa bleeding cash with flights stunted by lockdowns

Lufthansa said it needs to double operations from current levels if it’s to stem losses, delivering a stark assessment of the challenge facing carriers as European governments limit flights with a new wave of coronavirus lockdowns. Capacity deployment must increase from 25% of year-ago levels at the moment to about 50% in order to meet a goal of returning to positive operating cash flow some time next year, Lufthansa said Thursday. Europe’s biggest airline probably won’t hit that level until the second half of 2021, meaning it must step up efforts to cut cash burn to avoid an equity raise before next summer, Sanford C. Bernstein analyst Daniel Roeska said in a note. Lufthansa is clinging to cash and savings targets as the latest flight curbs force carriers across the region to reassess plans for a winter low season that generally produces losses even in normal times. CEO Carsten Spohr said his company needs to use an “inevitable restructuring” to boost efficiencies in order to ride out the crisis. “We are now at the beginning of a winter that will be hard and challenging for our industry,” Spohr said in the release. Lufthansa said it’s making progress toward some of its targets, predicting that the operating cash drain will be limited to about E350m a month this quarter. It had planned to trim the figure to no less than E400m for the winter.<br/>