Lufthansa said it will cut 3,500 administrative posts as it seeks to improve profitability through €1.5 billion in savings.
The world-wide job cuts will help deliver one-third of the savings Europe's second-biggest airline aims to deliver by the end of 2014, it said today in a statement. A global purchasing project will save €200 million this year, while traffic optimisation will cut costs by €10 million, it said.
Lufthansa, which has 117,000 employees, yesterday reported a first-quarter operating loss of €381 million, compared with a €169 million deficit a year earlier. Analysts had predicted a €297 million loss.
"Higher taxes, fees and charges put a massive strain on our quarterly result," chief executive Christoph Franz said today. The savings program "is our own response to these additional burdens. It will safeguard Lufthansa's position."
Shares of Cologne-based Lufthansa fell as much as 3.1 per cent to €9.60 and were trading 1.7 per cent lower this morning in Frankfurt.
The company's Swiss and Austrian Airlines units had losses of €6 million and €67 million respectively in the first quarter, according to today's statement.
The cargo unit generated €19 million and Lufthansa Technik some €62 million.
The company has frozen capacity growth at its main brand, consolidating administrative operations between its short-haul outfit and Germanwings low-cost unit. Sales rose 5.6 per cent to €6.6 billion in the first three months, it said yesterday.
Lufthansa completed the sale of BMI to British Airways parent International Consolidated Airlines Group SA on April 20th, while Austrian Airlines said yesterday it would transfer flight operations to regional arm Tyrolean Airways to help stem losses.
Bloomberg