Lufthansa cuts 3,500 administrative jobs in cost control strategy
German airline Lufthansa will cut 3,500 ‘administrative posts’ worldwide over the next few years, as it aims to save €1.5 billion and improve profitability.
The company said it would achieve the office workforce reduction "in the coming years". This would be achieved by “combining redundant functions” and dropping "activities that do not create added value for our customers". Some functions could be outsourced, it added, but there have not yet been details on exactly which airline roles or airport jobs will be hit hardest.
The announcement comes as Europe’s second-biggest airline reported a first-quarter loss of €397 million. Last year’s loss was €169 million.
First-quarter sales did reach €6.6 billion - 5.5 % higher when compared year-on-year. But this could not offset the soaring price of jet fuel, said Lufthansa.
Lufthansa has outlined its strategy to deliver massive cost savings by the end of 2014. This will be achieved by shedding the 3,500 administrative posts, as well as using global purchasing to save €200 million, and pursuing traffic optimization which aims to cut costs by €10 million.
Lufthansa’s chief executive officer Christoph Franz said in an announcement that higher taxes, fees and charges had put a massive strain on the first quarter’s financial performance. These included an air traffic tax imposed in Germany and Austria, and the additional costs of carbon emissions trading in Germany.
Franz said the savings programme “is our own response to these additional burdens. It will safeguard Lufthansa’s position”.
The company’s Swiss and Austrian Airlines units had losses of €6 million and €67 million respectively in the quarter. Meanwhile the cargo unit generated €19 million and Lufthansa Technik €62 million.
Last month, Lufthansa completed the sale of loss-making UK airline BMI to International Airlines Group, which owns British Airways and Iberia.
Picture: Lufthansa AG




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