Lufthansa hopes to cut 20% of current administrative jobs by 2028 as the carrier struggles to turn a profit amidst higher operating and labor costs. The German carrier is banking on using automation and artificial intelligence to fill in the gap.
Lufthansa Will Cut 20% Of Administrative Jobs, Blaming Higher Operating Costs
Lufthansa saw its operating profit drop by 9% in the last quarter and expects to only break even for the year as it struggles with:
- higher costs
- International competition
- low yields (the average amount of revenue received per paying passenger flown one mile)
A German magazine reported that one way Lufthansa plans to address this is by eliminating one in five administrative positions at the airline, a move that would impact about 400 positions.
When asked Lufthansa clarified that it would not be making any particular worker redundant, but instead stop filling positions as current employees moved to other parts of the company, retired, or left.
“There is currently a hiring freeze in the administrative areas of Lufthansa Airlines. A reduction in the number of staff is to be achieved through age-related, natural fluctuation.”
Lufthansa would not be the only carrier to trim its workforce in favor of automation. German automaker Volkswagen recently announced it would close “at least” three manufacturing plants in Germany, citing higher costs and a move toward automation. The move would cut “tens of thousands” of jobs and also reduce staffing at its remaining facilities. If it happens, it would be the first time in Volkwasgen’s history that it shut down a German plant.
Omnionous warnings about AI taking over all of our jobs continue to strike me as far-fetched over the next decade or two, but there is no doubt that the future of AI and automation may render certain jobs and skillsets far less marketable in an environment of intense competition for a limited number of jobs.
Lufthana’s woes are not unique, but suggest a sad trajectory for the German airline and a broader economic trend we will see more of in the years to come at US carriers as well.
image: Lufthansa
I am a fan of normal intelligence and reasoning . Like the Greeks , for example .
Not pre-programmed artificial dictators with agendas . Like Orwell’s Big Brother , for example .
“Hey Siri. Fly this airplane to Frankfurt.”
There may be a reason why AI Siris are named after clueless teenage girls who could not change a wheel when a flat tire …
and why AI are not named after skilled mechanics such as Joe Schmoe who are needed to care for the actual planes .
Poor LH , now they will need to hire numerous tech weirdos to tech around with the AI computers , at a large cost .
There are plenty of jobs that would probably be better served by AI such as “revenue enhancement” or crew scheduling. The former is mainly using math to determine how to optimize routes and/or capacity controls. The latter being a shell game that incorporates regulations, seniority and personal preferences. This is where AI shines. Where it works poorly is customer interaction (e.g., phone-based customer service, anything at the airport, etc.). If done properly it could actually improve certain outcomes.
I find it a little ironic that Lufthansa keeps starting up low cost subsidiaries then those subsidiaries offer low fares that Lufthansa has to match and consequently Lufthansa earns less because fares are low.
Great news, finally the arrogance of LH staff will slowly fade away