Savings program so far not enough to battle “headwinds”
Lufthansa’s savings program has so far not been effective enough in the battle against higher fuel prices and a weak economy, the airline’s chief executive Christoph Franz stresses in an employee newsletter. The company’s savings initiative, known as SCORE was launched earlier this year to raise earnings by an additional €1.5 billion a year by the end of 2014, compared with 2011. But even though SCORE will reach its target for 2012, high fuel costs and the economic environment have been too strong for the cost cuts to have the desired impact.
“Due to the headwinds we face, the progress we have made is not visibly reflected, as we had hoped, in our financial result,” Franz writes. “Therefore we have to work harder to achieve SCORE’s planned earnings improvement of €1.5 billion in the end.”
As reported, Lufthansa has found €1 billion in possible cutbacks in its passenger airline business.
[pictured: Lufthansa Boeing 747-8; courtesy Lufthansa]