Airlines

American Airlines in talks with Airbus and Boeing for Major aircraft Order

In the midst of a travel boom, American Airlines revealed on Wednesday that it has begun talking to top aircraft manufacturers Airbus and Boeing about placing a fresh order for narrowbody aircraft. The timing of these discussions coincides with airlines’ urgent need to restock their fleets in order to keep up with the surge in demand for travel.

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In earlier reports, Bloomberg News cited sources familiar with the situation to say that the airline was in talks to place an order for at least 100 new jets with the manufacturers. Industry sources told Reuters that the conversations are still in the beginning stages and that no decisions are final.

American stated in a statement that “We are talking to Boeing and Airbus about our narrowbody aircraft needs for the latter half of this decade and beyond.”

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American Airlines hinted to its limited fleet replacement requirements during an investor call last month, despite the fact that their planning was still in the early stages. The airline said that “we expect aircraft capex to average about $3.5 billion per year for the next several years and likely through the end of the decade.” With agreements for further acquisitions, the deal size may exceed 200 jets.

The airline is reportedly considering the 737 Max from Boeing and the A321neo from Airbus to replace its 737-800, A319, and A320 single-aisle models later this decade. Negotiations have been ongoing for a while.

Airlines

German Carrier Lufthansa Plans for 20% Job Cuts in Administration

Lufthansa Airlines is reportedly planning significant job cuts in its administrative workforce. According to Manager Magazin, the German carrier intends to reduce administrative positions by 20% as part of its cost-cutting measures amidst an anticipated decline in earnings.

This reduction could impact approximately 400 jobs, the report revealed. While Lufthansa has not directly commented on the layoffs, the airline confirmed its goal of cutting administrative costs by 20% by 2028.

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The strategy involves leveraging digital technologies, including artificial intelligence and automation. “A hiring freeze is currently in place for administrative roles at Lufthansa Airlines,” said a company spokesperson.

The staff reduction is expected to occur through natural attrition and age-related turnover, rather than forced layoffs. The internal projection cited by the magazine warns that Lufthansa could face an operating loss of €800 million ($843.92 million) by 2026 if no corrective measures are taken.

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The report highlights the challenges companies face in aligning workforce requirements with current and future demands. Failure to adapt could necessitate drastic actions, such as restructuring and layoffs, which carry significant repercussions for both the organization and its employees.

As Lufthansa navigates these challenges, the airline appears committed to balancing cost efficiency with digital transformation to maintain its competitiveness in a rapidly evolving industry.