Lufthansa to launch big cost cuts: Company
Lufthansa, the leading German airline, is to launch cost cuts to save one billion euros (1.4 billion dollars) per year from 2011, a spokeswoman said on Thursday.
By Agencies |
FRANKFURT: Lufthansa, the leading German airline, is to launch cost cuts to save one billion euros (1.4 billion dollars) per year from 2011, a spokeswoman said on Thursday.
"We confirm" a report earlier in the day by the business daily Handelsblatt which said the plan, dubbed "Climb 2011," would focus on passenger transport activities, spokeswoman Claudia Lange told AFP.
"Our passenger costs must fall," and details will be released in the coming weeks, she added.
A letter sent by Lufthansa chief executive Christoph Franz to the airline's staff warned that "air traffic is mired in the worst crisis in its history."
After posting a first-quarter loss, Lufthansa's first-half results "will show that this negative trend is continuing," he added.
"Unless market conditions change, our losses will increase significantly in the coming year owing especially to the rise in fuel prices," Franz said.
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An airline analyst quoted by Dow Jones Newswires expressed doubt however that Lufthansa would reach its cost-cutting target owing to likely strong resistance from trade unions. The analyst noted that the Cockpit union that represents pilots has already made negative comments on the airline's cost-savings plans.
In mid June the carrier had said slumping passenger and freight traffic would force it to take additional measures to avoid posting a full year loss.
Lufthansa is also trying to take over two European carriers at the moment, Austrian Airlines and the Britain's BMI.
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The bid for Austrian Airlines has become less certain however, because Lufthansa has failed to address competition concerns expressed by the European Commission, which must approve the deal. Lufthansa shares gained 0.82 percent to 9.17 euros in morning trading on the Frankfurt stock exchange, while the DAX index of leading stocks was essentially unchnaged overall.
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