I don't know what your agenda is, all we know is that you are for the German team and have a few dozen posts on this website waving the Lufthansa flag, going to extremes to bend facts.oldblueeyes wrote: ↑16 May 2020, 21:16If you would make an effort to read the annual report and assuming that ou have the econoomical education to understand it, the answers are public.Flanker2 wrote: ↑16 May 2020, 19:05It's all about the profits right?
Can you explain then why LH are going around asking for money like beggars after years of profits in their other units?
What did they do with their profits?
If it's all about the earnings, why should the taxpayer give up a part of their earnings to Lufthansa?
So Lufthansa only needs to worry about profits and the taxpayers need to worry about protecting the jobs of the people working for Lufthansa?
Shouldn't companies look out for their own people?
Lufthansa should stop growing if they can't take care of the people they already have.
Lufthansa had a problem in the early 2010s with a lot of enheritaed fleet of the former companies they bought and bad decisions from pervious managements. Thus a big chuck of money is going into fleet investments.
If you compare the figures of the last years , than you had something like 2,8 bln EUR EBIt as a maximum and above 3 bn annual investments into new fleet. You might blame it, but this is the way the industry is growing and creating jobs - by the way trough flying old A320 until they were 30 years old and so on on the positive side and of course retiring early A346 which were an unfortunate purchase on the downside.
As comparison .. the max dividend paid by the company was 400 Mio last year, employee bonuses in the group were 500 mio.. from big CEO bpnus to the small annual gratification of the front line manager in a remote station.
And now let's come to the numbers - if all of you would have the patience and intelligence to read and understand more than a hedline, than you would see that the discussion is about CREDIT and AID.
So CREDIT has to be paid back and has a higher interest rate - for example in Switzlernad the state takes 2% above the interest rate the banks are charging as price for guarantee in difficult times. So it is rather the case that the Swiss tax payer is earning money on this.
Aid is another topic - and it is linked tio preserving the jobs until the business is rescheduled. And here there is a shareholder effort as well - for example in Germany the state pays 60 to 67% of the salary during shut down times and the company burns shareholder money on improving these figures up to 90%.
So the question on saving jobs is - shoud they dissapear becaue everbody has to be clear that next year in a positive scenario only 50% of the fleet would utilized and employees might have to be unemployed - or will there be a joint effort of all involved parties - state give some money ( they would have the uneploment cost as a burden anyhow), the company supplements it and the employees contributa trough a payy cut and temporary part time to save as many jobs as possible?
If all these people would loose their jobs for the next 2 years - what would be than the cost for the Belgian social systems?
Remember the golden rule of business - the difference between 1 euro spent and 1 euro earned is always 2 euros!
What would be the monthly cost of opportunity for each employee?
Let'S assume they would be unemployed - can we calculate a "cost" of 2.500 euro per month for the Belgian state? Unemployment allowance, additional social system costs that have to be paid by the social systems, additional revenues of the state like VAT, fuel accizes etc for lost additional spending power etc.
On the contrary, if these people stay employed, even if they earn less due to part time, temporary income reductions etc, they are still net payrs in the social systems , pay direct taxes , pay indirect taxes on what they earn above an unemployment allowance etc. So you would have on average maybe 1.500-2.000 euro earnings for the state each month coming from retirement, health , jobless insurances paid both by employee and employer, some little additional indirect taxes as they would have more money in the pocket tha unemployed...
So if you calculate, the cost of opportunity for the Belsian state for each employee of maybe around 4.000 euro /month .. or 50.000 eur / year.
Now let's see the big picture.
If 3.000 employees would be the new taregt size of the company.. and they would need for the next year maybe 1.000, next year 2.000 and coming towards 2023 into the target employment rate... than finding a solution for 2.000 people for the mext 12 months and for 1.000 the year after might have acost of opportunity of 150 mio EUR for the Belgian taxpayer only on direct jobs, multiplicators for airport jobs etc not considered.
Now, would you give as a state a credit of 300 mio if the alternative is to damage your baalnce sheet by 150 mio?
The Swiss seemed to be keep to guarantee for approx 2 years profts of a health compan and let Lufthansa negotiate the remaing abount of aof 15% of the total credit.
Or maybe does the blegian politics not believe that Brussels can be turned into profitability?
Lufthansa had a problem in the early 2010s with a lot of enheritaed fleet of the former companies they bought and bad decisions from pervious managements. Thus a big chuck of money is going into fleet investments.
If you compare the figures of the last years , than you had something like 2,8 bln EUR EBIt as a maximum and above 3 bn annual investments into new fleet. You might blame it, but this is the way the industry is growing and creating jobs - by the way trough flying old A320 until they were 30 years old and so on on the positive side and of course retiring early A346 which were an unfortunate purchase on the downside.
BS.
Fleet investments are not taken from earnings like you suggest.
If new aircraft are leased they are operating costs and if owned they are asset depreciations and hence are included already in earnings calculations.
Example: New A380 acquired for 200M USD to be used over 20 years, used as collateral for a loan over the same period and same amount: Linear depreciation of 5% or 10M USD per year and you pay off the loan at the same pace. Each year your EBIT already includes 10M USD in costs, so no need to use the earnings of the past year for that.
A fleet investment typically means that your depreciations or lease costs become higher, but you hope to recover more than that by saving on fuel and maintenance. In some cases you also hope in an increase in revenue (when you replace by a larger aircraft or better product attracts more pax). Otherwise it's not an investment but stupid vanity.
A fleet investment should hence increase your future EBIT by decreasing some cost centers more than other cost centers increase, and you don't need to finance them from earnings.
If all these people would loose their jobs for the next 2 years - what would be than the cost for the Belgian social systems?
Remember the golden rule of business - the difference between 1 euro spent and 1 euro earned is always 2 euros!
What would be the monthly cost of opportunity for each employee?
Let'S assume they would be unemployed - can we calculate a "cost" of 2.500 euro per month for the Belgian state? Unemployment allowance, additional social system costs that have to be paid by the social systems, additional revenues of the state like VAT, fuel accizes etc for lost additional spending power etc.
On the contrary, if these people stay employed, even if they earn less due to part time, temporary income reductions etc, they are still net payrs in the social systems , pay direct taxes , pay indirect taxes on what they earn above an unemployment allowance etc. So you would have on average maybe 1.500-2.000 euro earnings for the state each month coming from retirement, health , jobless insurances paid both by employee and employer, some little additional indirect taxes as they would have more money in the pocket tha unemployed...
So if you calculate, the cost of opportunity for the Belsian state for each employee of maybe around 4.000 euro /month .. or 50.000 eur / year.
Well actually, if those employees lose their jobs, it's the fault of Lufthansa.
Don't buy companies if you can't support their employees during the next downturn.
Why should employees or taxpayers pay the price for Lufthansa's hunger for world domination?
"We own Switzerland (LX), we own Austria (OS), we own Belgium (SN), we own Germany (AB), let's own Italy (AZ), let's own Portugal (TP). Ow no, the Polish are stealing Condor from us. Ow no the Italian government don't want to agree to our conditions."
Instead of playing this game, they should have saved cash, paid off debt, and done risk management reviews of their lease contracts, debt covenants, and workforce; and run all kinds of scenario's including a pandemic scenario. SO BASICALLY DO THEIR FREAKING JOBS AS MANAGERS OF A MULTINATIONAL HOLDING.
This crisis almost happened with SARS and already happened several times in human history so was a credible scenario and we recently also had the volcano scenario which had the potential to cause long-lasting groundings.
As for the cost of saving the jobs to the Belgium State, it's not the same if they invest 290 or 390 Millions into a SN owned by Lufthansa or a 100% nationalized SN.
The difference is that if SN is nationalized, they can control how the money will be spent to save jobs and the airline, while under Lufthansa, at least 1000 jobs are going to be cut anyway and the other 3000 jobs are also not secure while demanding insane sacrifices.
LH is not even willing to let the Belgian State monitor how they spend the money.
The Italians preferred to nationalize their airline rather than give it to LH with all the cuts they were asking.
They are investing 3 Billions to ride this crisis out and then come back stronger and better funded than ever.
As for Lufthansa receiving 6 Billions in AID as you call it, or capital injection, do they really need so much, or is the German government trying to give its favorite airline a boost in their quest for world domination?
All good and well, but what about all the rest of corporate and SME Germany? If they start giving money like that to LH, you can bet that other companies are going to line up for their own free hand-outs.
Siemens, Volkswagen but also the entiree German Mittelstand want to dominate the world in their respective sectors. Germany is already giving all of them huge subsidies to boost their competitiveness, but they're still a long way from giving 100k per employee like they're doing for LH.
I think that LH is either lining up to dump SN or they are playing the comedy in collaboration with the Belgian government.
They wouldn't otherwise have announced the job cuts and insane salary cuts before having a deal with the government. I don't know but perhaps they're trying to find a scapegoat for SN's failure.
The alternative is that perhaps they already have a deal but pretend that they don't so that the job and salary cuts become more digestable.
We'll find out in a couple of weeks I guess.