Cost reductions to ensure investments of €9 billion over three years
Lufthansa’s executives have described their tough cost-cutting measures to take place over the coming three years as being like to “knock down and rebuild” the airline. Cost reductions will, they say, ensure investments of €9 billion over the next three years. The airline has already started its SCORE program that aims to boost operating profit by at least €1.5 billion by 2014. CEO Christoph Franz said in an employee newsletter that, in the face of competition from fast-expanding Gulf airlines and low-cost carriers, the program was absolutely necessary. Overheads will be cut and purchasing activities brought together. Also the company’s 120,000-employee administration will be streamlined.
“We no longer have a tailwind,” Franz commented in the newsletter.
[pictured: Lufthansa A380 in hangar, Frankfurt]