German airline Lufthansa announced on Wednesday a net profit loss of 2.1 billion euros (2.35 billion dollars) for the first quarter, and said it is embarking on a restructuring plan after the coronavirus pandemic grounded most of its flights from early March onwards.
The company is preparing its employees for major cuts, despite reaching a 9-billion-euro bailout deal with the German government, which is close to being approved by the European Union.
"In view of the very slow recovery in demand, we must now take far-reaching restructuring measures to counteract this," Lufthansa chief executive Carsten Spohr said in a statement.
Management intends to reduce unit costs "significantly" compared to pre-crisis levels, Spohr said, though Lufthansa did not initially provide more detailed information on job cuts.
In order to be able to repay loans and interest quickly, the company will have to increase its free cash flow significantly compared to pre-coronavirus times, Executive Board member Thorsten Dirks said.
Lufthansa had delayed releasing its quarterly earnings due to the coronavirus pandemic.
In the quarterly earnings report published Wednesday, Lufthansa noted an adjusted operating loss of 1.2 billion euros.
Group revenue in the first quarter fell by 18 per cent to 6.4 billion euros, down from 7.8 billion euros the previous year.
In April, the Lufthansa Group airlines recorded a 98.1 per cent year-on-year decline in passenger numbers to 241,000, while supply fell by 96 per cent.
While almost 700 of the Group's 763 aircraft were recently on the ground, management estimates that 300 of them will still be grounded next year and 200 in 2022.