German
flagship airline Deutsche Lufthansa (LHAG.DE) said it needs to cut costs at its
profitable long-haul business to cope with rising fuel prices and stiff competition
from Gulf carriers.
Lufthansa said in an employee newsletter distributed on Monday that it
aims to reduce unit costs at its long-haul business by 10 percent
by 2015 and by 20 percent by 2025, compared with 2011.
"Lufthansa is booking increasingly large declines in income on
long-haul routes, even on trunk routes such as Beijing of Shanghai," it
said.
The new savings project, dubbed SPRINT, is part of a company wide plan
to improve annual earnings by 1.5 billion euros ($1.96
billion) by the end of 2014.
Lufthansa has already frozen investments, announced job cuts and is
combining its loss-making European short-haul unit with its low-cost carrier
Germanwings.
SPRINT will focus on lowering fuel expenses and re-negotiating pricey
contracts with suppliers but will also examine possible measures related to
infrastructure, crew, fleet planning, cabin layout and ground processes, Lufthansa said.
Reuters
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