Fuel costs send Lufthansa further into the red and prompt job cuts
GERMANY’S biggest airline yesterday announced plans to cut 3,500 office jobs in an attempt to stem widening operating losses.
Lufthansa reported an operating loss of €381m (£309m) for the first three months of the year, more than double its losses a year ago, as high fuel and tax costs along with fierce competition across Europe battered its bottom line.
The loss came despite a 5.6 per cent rise in revenues to a record €6.6bn and higher traffic figures.
“We can only safeguard jobs for the long term and create new openings if we reorganise the administrative functions and accept job losses now,” chief executive Christoph Franz said in a statement.
The firm aims to cut administrative costs by 25 per cent and slim down other operations to improve Lufthansa’s annual operating profits by at least €1.5bn by the end of 2014.
Lufthansa said that despite the economic turbulence that has weighed on its sales, “the mood has lightened overall” recently, and it has kept its full year operating profit forecast of a figure in the mid-hundreds of millions of euros.
The German carrier’s move came as Scandinavian airline SAS blamed high fuel prices for a quarterly loss that was more than twice as large as analysts had forecast.
•Irish carrier Aer Lingus yesterday upgraded its 2012 operating profit forecast, saying it expected to match last year’s €49m as higher revenue per passenger mile compensated for growing costs.