FRANKFURT (Reuters) - Lufthansa (DE:LHAG) is reviewing options for its Germanwings business after ruling out a union proposal to consider shortened work hours, also known as Kurzarbeit, as a stop-gap solution for helping the low-cost unit conserve cash.
"There is no agreement on Kurzarbeit, the management board is reviewing options," a Lufthansa spokesman said in response to a question about whether Germanwings was slated for closure or whether shortened work hours would be implemented.
Kurzarbeit is a policy tool in Germany which allows companies to slash wage bills by tapping an unemployment fund overseen by Germany's Federal Employment Office. Once a company agrees to it, it cannot implement forced layoffs on those employees slated for shorter work hours.
Vereinigung Cockpit, and UFO, trade unions representing pilots and cabin crew had negotiated a proposal to put 1,400 Germanwings staff on shortened work hours, which Lufthansa then declined to implement.
"The future of Germanwings is increasingly called into question," Lufthansa added.