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Lufthansa said on Wednesday it had reached a new deal with trade union Verdi to cut E200m in costs in return for making no compulsory redundancies in 2021. Lufthansa warned last week it would burn through more cash in Q4 than in the third and that further restructuring measures would weigh on its results as it struggles to cope with the effects of the COVID-19 pandemic. The airline and its subsidiaries, Eurowings, Swiss, Austrian and Brussels Airlines, are slashing their schedules, fleet and staff, with air travel not expected to recover to pre-pandemic levels before 2025. It aims to cut 22,000 full-time jobs. “We have taken a first important step towards reducing ground staff personnel costs,” HR head Michael Niggemann said. “However, we cannot slow down our efforts in continuing to work on crisis-management measures.” The deal with Verdi comes after months of talks that were repeatedly broken off. Verdi accused the company of seeking to cut jobs even after it took a 9-billion-euro government bailout. Lufthansa said 24,000 ground staff would forgo their usual Christmas bonuses in 2020 and 2021 as well as vacation bonuses until the end of 2021. The company will also cut the amount it tops up government payments to staff working short-time. Together these measures will cut personnel costs by up to half in 2021, depending on the total hours worked. In return, Lufthansa promised not to make forced layoffs in 2021, while offering partial retirement and voluntary redundancy programmes. It will continue talks on long-term cuts in labour costs from Jan. 1, 2022 when government compensation ends. Verdi said its members still had to vote on the deal.<br/>

Lufthansa said Wednesday it would revive the role of finance chief and had hired Remco Steenbegen from Swiss chocolate maker Barry Callebaut to fill the post. Steenbegen, a 52-year-old Dutchman who has managed Barry Callebaut’s finances since March 2018, will be new to the aviation industry when he starts at Lufthansa in January. He previously worked for consultancy KPMG and technology group Philips in Europe, Asia and the United States. Lufthansa said in April that it would share the tasks of former finance chief Urik Svensson across its management board after he resigned for health reasons. Lufthansa group CE Carsten Spohr has lately taken on the function. “Especially now, when the pandemic is having such serious consequences for air travel, an internationally experienced and well-respected CFO is more important than ever for Lufthansa Group,” supervisory board chief Karl-Ludwig Kley said.<br/>

Korea Development Bank (KDB) is in the hot seat over its decision to undertake an equal reduction in share capital for cash-strapped Asiana Airlines. For corporate restructuring, creditors often adopt a differential capital reduction drive and apply steeper reduction for major shareholders than minority shareholders. This is because large shareholders should be held responsible for poor management. But the main creditor of Asiana decided not to follow the typical restructuring process to keep its earlier promise to Kumho Industrial, the major shareholder of Asiana. The state-run lender offered to sell Asiana shares obtained by Kumho at a "reasonable price" without taking steps for the differential capital reduction in 2019 when Asiana's restructuring was in its infancy. At that time, this raised controversy that the creditor was giving preferential treatment to the management of Kumho Industrial. Even if former Kumho Asiana Group Chairman Park Sam-koo stepped down from the leadership in March 2019, a group of management-level executives who worked with Park still maintain their seats on the company's board of directors. "Controversies will continue to repeat over the relationship between KDB and Kumho unless the creditor takes steps for the differential capital reduction," an industry source said. "But KDB is unlikely to change its position for the time being due to the backlash from Asiana's minority shareholders, as this means KDB broke its promise and acknowledges that its earlier decision has failed."<br/>

Lufthansa subsidiary Swiss is temporarily withdrawing 28 older Airbus A320-family aircraft from service for the winter timetable to save costs, and instead deploying “more efficient” Airbus A220s, A320neos and A321neos across its short- and medium-haul network. The Zurich-based carrier made the disclosure on 5 November as it reported a Swfr415m ($452m) operating loss for the nine-month period to 30 September, compared with a profit of Swfr490 million in the first three quarters of 2019. Its Q3 operating loss of Swfr148m was lower than the Swfr244m loss incurred in Q2, which the carrier attributes to the gradual restoration of flights over the summer and “substantial cost reductions”. Swiss says it is temporarily taking the 28 A320s out of service “in a further effort to lower costs”. Other actions include “deferring all projects and investments companywide that are not essential to business operations”, and the reduction of 1,000 jobs over the next two years through a combination of hiring freezes, early retirements and part-time working options. Earlier this month, Swiss agreed a “time-limited” labour pact with the Kapers union, which represents its cabin crew. If ratified by members, the agreement will begin in March 2021 and run until 2023, reducing costs by 10% during that period. Revenue for the nine-month period ended 30 September fell almost 62% year-on-year to Swfr1.54b. Capacity was cut 63% and RPK traffic fell 72%, resulting in a 20 percentage-point drop in load factor to 64.2%.<br/>

New Zealand investigators have closed an inquiry into two incidents involving engine problems on Rolls-Royce-powered Boeing 787-9s operated by Air New Zealand. The country’s Transport Accident Investigation Commission states that the incidents involved fracture of intermediate-pressure turbine blades on Trent 1000 powerplants. Deterioration of these blades was one of several issues affecting various blade types in the engine, and Rolls-Royce has undertaken extensive work to study and correct the problems. The first ANZ incident involved an in-flight engine shutdown – as well as damage to the airframe – resulting in the return to Auckland of a 787-9 service to Tokyo on 5 December 2017. This was followed, just a day later, by an engine anomaly on a second 787-9, bound for Buenos Aires, which also returned to Auckland. Both aircraft were fitted with the Package C version of the Trent 1000. Corrosion fatigue cracking was identified, which had led blades to fracture and separate from the intermediate-pressure turbine disc. The New Zealand commission says Rolls-Royce’s addressing the safety issues identified in its interim report has “satisfied” the investigators. “Further lines of inquiry would be unlikely to identify further circumstances with significant implications for transport safety,” says commission deputy chief Stephen Davies Howard. He says prolonging the probe would not result in additional findings or recommendations.<br/>

Air NZ has named former staff member Richard Thomson as its replacement for outgoing CFO Jeff McDowall. Thomson, who has been CFO of listed retirement village operator Metlifecare for the past three years, is expected to take up his new role with Air New Zealand in early 2021. Thomson will be part of a new look executive team which, like the rest of the company, is a third smaller than what it was pre-Covid-19, reducing in size from nine to six. In May, as part of Covid-19 cost-cutting measures, CE Greg Foran let go long-serving executives Nick Judd, Mike Tod and John Whittaker. In September chief commercial and customer officer Cam Wallace resigned followed by McDowall’s resignation in October. McDowall has been at Air New Zealand for more than 20 years, with roles including acting chief executive. He will leave the airline after the completion of a planned capital raise in 2021.<br/>