Luxair to loan staff to state as pandemic lull drags on

Luxembourg’s national carrier will loan 69 members of its staff to the state as it does not have enough work for its employees because of the pandemic downturn in travel.

The agreement announced on Tuesday comes between the government, Luxair and labour unions helped protect 600 jobs at the airline. The government pledged to spend €50m on training for staff to be reassigned while half the staff threatened with redundancy opted for early retirement.

But Luxair still does not have enough work for 69 employees who will now be loaned to the state to work in the public sector. Their salaries will be paid by the employment fund, a state funding mechanism that, for example, pays social security contributions for companies hiring long-term jobseekers.

Labour unions welcomed the agreement, saying it was preferable to placing people under partial unemployment under which the state pays for 80% of employee wages working reduced hours.

“The longer people stay in partial unemployment, the harder it is to return to the job market,” said Michelle Cloos of the OGBL at a press conference on 21 September.

While Tuesday’s agreement foresees that staff are on loan for five years, labour minister Dan Kersch (LSAP) said the objective is to make the transfers permanent in the long-term.

Another 138 employees reassigned from Luxair earlier in the pandemic to the health and environment ministries, jobs agency Adem and the national archives face a less certain future as their permanent reassignment is not guaranteed.

The state owns a 38.9% direct stake in Luxair but another 21.4% through the wholly state-owned Spuerkeess. BIL (13.3%) and Delfin (13.3%) make up the other sharholders. Another 12.86% of the company is owned by Luxair and Luxair Finance.

Even a pick-up in business over the summer could not make up for the drop in business prompted by the pandemic.

“The results for the summer period cannot be extrapolated to the rest of the year. We flew a lot in August, with a decent capacity rate. But the trend will not continue into the fall or early next year,” said Luxair CEO Gilles Feith.

“Consumers must also be aware of their social responsibility. We cannot have everything. We cannot have meat for one euro a kilo and farmers who have enough to feed themselves. It's the same in aviation,” he said.

For the first six months of the year, Luxair reported an 81% drop in passenger numbers compared to 2019, from 687,844 to 133,609. This was mostly driven by a lack of business travel.

The company’s LuxairTours segment, offering package holidays, fared better with a 45% drop in passengers, from 271,745 in the first half of 2019 to 148,525 for the same period this year.

With additional reporting by Jérémy Zabatta