Lufthansa has announced plans to cull 3,500 ‘administrative posts’ worldwide over the next few years, as it aims to save €1.5 billion and improve the company’s profitability.
Germany’s leading airline said it would achieve the office workforce reduction "in the coming years", which would be achieved by “combining redundant functions” and dropping "activities that do not create added value for our customers". Some functions could be outsourced, the company added. No details have yet been released about 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. While first-quarter sales did reach €6.6 billion - 5.5 % higher when compared year-on-year - 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.
The company’s Swiss and Austrian Airlines units reported 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.
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Picture: Lufthansa