Lufthansa Vows Cost-Cutting After Profit Dives

Lufthansa today warned it would launch a significant cost-cutting effort in the next few weeks after passenger revenues fell by more than 19 percent in the first six months of 2009, year over year.

The German carrier announced it made an operating profit of only €8 million between January and June, a far cry from its €677 million profit in the first six months of 2008. Lufthansa attributed the decline to markedly lower demand, particularly from the business travel segment, as passenger traffic revenue dropped from €9.7 billion to €7.85 billion.

As a result, Lufthansa said it has launched an effort to improve passenger earnings by €1 billion by 2011. "The focus will lie on cutting costs," the carrier said in a statement, adding "the measures of the program would be elaborated and implemented during the upcoming weeks."

"The figures speak for themselves," said Lufthansa CEO Wolfgang Mayrhuber. "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."