Lufthansa has seen the rate of decline in business class bookings steady, the German flagship carrier's Frankfurt hub manager Karl-Rudolf Rupprecht said.

"But there is no improvement yet," he said Monday.

Airlines around the world have been hit by businesses tightening their travel budgets and switching from business and first class seats -- the most lucrative sector for carriers -- to far cheaper economy seats or budget airlines.

Industry body IATA said earlier this month the fall in the number of premium class passenger was showing signs of stabilizing. To counter the shift to the back of the plane, many airlines have been aggressively discounting premium seats.

"Customers are still switching," Rupprecht said.

Lufthansa has said it plans to cut EUR1 billion euros (USD$1.4 billion) of annual costs by 2011 to safeguard its profitability in the downturn. The move will involve several hundred job cuts at its passenger airlines business.