Lufthansa is to institute a cost cutting programme on the back of a dramatic fall in first half profits.
The airline blamed weaker travel demand due to poor economic conditions for a slump in half-year profits.
Group profits for the first six months were down to just eight million euros from 677 million euros for the same period last year.
Lufthansa has launched “CLIMB 2011”, described as a scheme to safeguard earnings.
The aim is the “sustainable improvement” of the result for Lufthansa Passenger Airlines by one billion euros by the end of 2011; with a focus on cutting costs.
The measures of the programme will be detailed and implemented during the upcoming weeks, the airline said.
“Business travellers in particular, have increasingly been buying tickets in the cheaper booking classes, leading to a significant slide in average yields during the first half of the year,” the German carrier said.
Chief financial officer Stephan Gemkow said: “Lufthansa has made provisions and is holding its course against the competition in highly challenging conditions.
“This is a strong performance by all of the employees in the group; however, we still cannot be satisfied with this result.”
CEO Wolfgang Mayrhuber said: “The figures speak for themselves. Crises ruthlessly reveal the weak points and we shall act.
“It is only sustainable structures that will allow our company to match its past successes and succeed against the competition in the long-term.”
by Phil Davies
