POLITICS & INSTITUTIONS - ECONOMY

Luxair tripartite agreement staves off redundancies



Luxair planes on the tarmac at Findel in May this year. The pandemic has suffered a 69% drop in activity between January and September compared to the same period in 2019. Romain Gamba/Maison Moderne

Luxair planes on the tarmac at Findel in May this year. The pandemic has suffered a 69% drop in activity between January and September compared to the same period in 2019. Romain Gamba/Maison Moderne

Talks between Luxair, the government and labour unions on Wednesday concluded that around 20% of jobs will have to be cut at the carrier but parties agreed on a restructuring plan to limit the impact on the 600 staff affected. 

Luxembourg’s national airline is struggling amidst rising Covid-19 infections and ever-changing travel restrictions. Compared to the previous year, activity decreased by 69% between January and September, from more than 1m passengers in 2019 to a mere 323,000 in 2020.

The government will spend around €50m over the next three years to help retrain staff at the airline affected by the cuts so they can be reassigned into other functions. The tripartite talks also agreed on early retirements. “No one will be fired,” said Patrick Dury, head of the LCGB labour union.

Luxair’s collective labour agreement will be prolonged by three years, a period during which a salary freeze will also be put in place.

These developments are the result of the global pandemic that has seen travellers become increasingly apprehensive about air travel, causing Luxair’s numbers to collapse significantly since the beginning of the year.

After a comparatively successful summer that enabled Luxair to surpass its forecast for July and August, the airline is now experiencing a drastic slowdown of activity, with levels for October that are currently already 35% below initial forecasts and are expected to fall further during the upcoming winter months.

Faced with this significant decrease, Luxair has been forced to adapt flight plans and reduce capacity for November and December by up to 50% if there is no uptick in bookings.

Tour operator and cargo segment

The airline’s tour operating arm, LuxairTours, is facing equally devastating numbers, with 63% less activity between January and September 2020 than during the same period in 2019. A large part of this is due to a lack of bookings to Spain, which is the tour operator’s most popular destination. However, with many countries issuing travel restrictions, a lot of hotels on the Spanish islands, as well as on the mainland, have been forced to close prematurely, causing LuxairTours cancellations on Spanish destinations to outstrip new bookings over the past four weeks.

LuxairCargo, the business unit in charge of the company’s freight handling activity, has been able to somewhat recover since the beginning of the pandemic, with a 2% increase in activity compared to the previous year.