Lufthansa To Cut 3,500 Jobs In Savings Push

May 3, 2012

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Lufthansa has announced plans to cut 3,500 administrative jobs around the world as it tries to return to profitability.

"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 on Thursday.

Lufthansa fared better in the global economic crisis than peers such as Air France-KLM and British Airways, but Franz, who took the job at the start of last year, has said the airline needs to radically cut costs to remain competitive.

He has vowed to improve results by EUR€1.5 billion (USD$1.97 billion) by the end of 2014 as margins are squeezed by high fuel prices, a weak European economy and fierce competition from low-cost carriers and Middle East airlines.

Lufthansa, which has a workforce of about 117,000 people worldwide, said one third of the savings is to come from reducing staff costs.

Other measures include closer cooperation between its main Lufthansa brand and its low-cost carrier Germanwings and bundling some purchasing.

The news comes a day after Lufthansa reported a first-quarter operating loss that more than doubled to EUR€381 million.

It still sees 2012 operating profit declining to a figure in the mid-hundreds of millions of euros, which excludes possible costs related to the cost-cutting programme.