Lufthansa Group is to continue to invest in its business class product despite the growing acceptance of video-conferencing tools like Zoom.
Announcing its 2020 results, the airline group said it would launch a new business class product in 2022 that will feature “optimal sleeping comfort and more private space, along with more individual seating options”.
This is despite a belief that business travel and long-haul routes are expected to recover more slowly than leisure traffic and that people have become more accustomed to the likes of Zoom.
“The assumption is that the growing acceptance of digital communications tools will be partly to the detriment of physical travel,” the group said in its annual report.
The report revealed that the airline group, which includes Lufthansa, Swiss and Austrian Airlines, made an operating loss for 2020 of €5.5 billion, the worst figure in its history. Revenue at the group fell to €13.6 billion in 2020 from €36.4 billion in 2019.
Capacity at the group was 31 per cent of 2019 and passenger numbers were 36.4 million, 25 per cent of the figure from the previous year. Average load factor was therefore 63 per cent, 19.3 percentage points lower than 2019.
The group said it was making progress on cost reduction and had reduced headcount by 20 per cent to 110,000 in 2020 and said it expected to reduce this by a further 10,000.
Cash drain in the fourth quarter was €300 million a month but had available liquidity of around €10.6 billion.
The group said that despite the record losses, it had benefited from a hub system. It said, “Unlike competitors, who offer only point-to-point connections, the Lufthansa Group airlines were able to bundle the low traffic volumes at their hubs and thus maintain important connections."
Carsten Spohr, the group’s CEO, said: "The past year was the most challenging in the history of our company - for our customers, our employees and our shareholders. Travel restrictions and quarantine have led to a unique slump in demand for air travel. Now internationally recognised, digital vaccination and test certificates must replace travel bans and quarantine.”
Spohr said it was focusing on sustainability and is considering whether all aircraft older than 25 years will remain on the ground permanently.