Lufthansa plans new cost-cutting measures

16th December 2011, Comments 0 comments

German airline Lufthansa said Friday it is planning a new round of cost-cutting measures next year in face of intensified competition as a slowing global economy and high fuel costs hit earnings.

"At the start of next year, we'll launch a programme at group level to sustainably boost our productivity," the carrier's chief executive Christoph Franz wrote in a staff newsletter.

The details of the measures were still being worked out.

"We'll close this year with a positive operating result, but one which will not be big enough to secure the future of jobs and our group," Franz said,

"That is why we'll need a significantly higher operating margin in the medium term," he continued.

And he warned: "We'll feel more strongly the competition from low-cost companies in the European air sector and our rivals on long-haul routes."

Lufthansa is projecting operating profit of more than 500 million euros ($652 million) for 2011. Originally, it had planned to beat the figure of 876 million euros achieved in 2010.

The previous cost-cutting programme, launched in 2009, is scheduled to wind up this month. And Lufthansa expects it to have achieved the planned one-billion-euro reduction in costs at its passenger business.

© 2011 AFP

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