Europe's largest airline, Germany's Lufthansa, reported a loss of nearly SEK 22 billion during the first quarter.
Cuts equivalent to 20,000 employees are now expected.
After some hesitation in the morning, the stock price continued its upward journey on Wednesday.
During the period January to March, when Europe was in serious lockdown, Lufthansa made a loss after tax of 2.1 billion euros, equivalent to 21.9 billion kronor. This is six times more than the net loss a year earlier of 3.6 billion kronor.
The operating loss was SEK 12.5 billion, in line with the preliminary results that the company presented at the end of April. During the whole of last year, Lufthansa made an operating profit of EUR 18.8 billion.
Failed futures deals in jet fuel, which has become cheaper during the corona crisis, have cost nearly SEK 10 billion. In addition, the company has written down the value of 50 aircraft.
”"We must meet the likely slow recovery with profound restructuring," CEO Carsten Spohr said on Wednesday, according to the business newspaper. Handelsblatt.
In May, only 3 percent of the group's flights, which also includes Austrian, Brussels Airlines, Eurowings and Swiss, took off. In September, capacity will be up to 40 percent, with a focus more on tourists than business travelers.
Still, 300 of the group's 763 aircraft are expected to remain grounded through the end of the year, and 200 of them next year as well. The crisis is not expected to be over until 2023, but the company still has 100 aircraft too many.
Today, about 87,000 of the 137,000 employees work short-time workweeks with state support. The company wants to reduce the workforce by the equivalent of 20,000 full-time jobs through continued short-time work, according to Handelsblatt. This is double the previous figures.
The company also wants to review pensions, which sets the stage for conflicts with the combative unions for both pilots and flight crew.
Just over a week ago, Lufthansa received a promise of government aid of just under SEK 94 billion, a third of which was a loan from the state-owned bank KfW.
Lufthansa's board approved the plan on Monday, after the European Commission relaxed the requirement for how many takeoff and landing rights the company must release in Frankfurt and Munich. Only competitors that currently do not fly there, and do not receive state support, will be considered - if they promise to use the rights for three years.
However, many of Lufthansa's major owners remain hesitant about letting the state take up to 25 percent of the shares.
The government support has helped lift the share price by nearly 20 percent from the bottom in mid-May.
This has created problems for hedge funds that have speculated on a continued decline and have shorted shares. On June 1, over 11 percent of all free Lufthansa shares were lent, according to Handelsblatt.
However, the major Swiss bank Credit Suisse believes that the price increase is unjustified, and expects a fall of 50 percent to 6.25 euros. Analyst Neil Glynn is mainly concerned that the company is burning a lot of capital before the restart in the third quarter, according to the first the analysis published after Wednesday morning's report.
