Business, Economics and Jobs

Lufthansa to scrap 3,500 jobs


A Lufthansa passenger plane arrives at Tegel Airport on October 17, 2011 in Berlin, Germany.


Sean Gallup

German airline Lufthansa has unveiled plans to cut 3,500 jobs after reporting worse than expected operating losses in the first quarter of 2012 on Thursday.

The full-time administrative positions – 20 percent of the total – will be scrapped worldwide over the next few years in a bid to cuts administrative costs by a quarter, the BBC reports.

A global purchasing project will also cut 200 million euros from expenses this year, while it is hoped that “traffic optimization” will recoup at least 10 million euros, according to Bloomberg.

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On Thursday Europe’s second-largest airline reported an operating loss of 381 million euros ($500 million) for the three months to March 31, as economies slowed and restructuring and rising fuel costs weighed on earnings. The Cologne-based carrier also attacked air passenger taxes and aviation charges stemming from the EU’s emissions trading scheme.

The shortfall was bigger than the 273 million euro figure anticipated by analysts, The Financial Times reports, but Lufthansa said it expects to generate an operating profit “in the mid three-figure million euro range” in 2012, adding that economic uncertainty made it difficult to predict demand for its services.

Lufthansa, which told Bloomberg it couldn’t rule out job cuts on the operational side, fell as much as 3.1 percent to 9.60 euros and was trading 0.1 percent lower as of 10:55 a.m. in Frankfurt.

“Higher taxes, fees and charges put a massive strain on our quarterly result,” Chief Executive Officer Christoph Franz said Thursday. The job cuts and savings program “is our own response to these additional burdens. It will safeguard Lufthansa’s position.”

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