* Lufthansa unveils $19 bln order for 59 wide-body jets
* Orders 34 Boeing 777-9Xs and 25 Airbus A350-900s
* Planes will mainly replace older aircraft
* CEO says must continue cost cuts to pay for new planes
By Marilyn Gerlach and Peter Maushagen
FRANKFURT, Sept 19 Deutsche Lufthansa
unveiled a $19 billion order for new jets on Thursday as its
outgoing chief executive warned the historic investment must not
dilute the resolve of Europe's largest airline to stay in the
The deal for 59 new jets, split between Boeing and
Airbus, will see the German flag carrier launch a new
and larger version of Boeing's 777 long-range jet.
Lufthansa is in the middle of a dramatic revamp that
includes 3,500 job cuts, at the same time as investing in modern
jets to cut its fuel bill and catch up with deep-pocketed Gulf
rivals, particularly on hotly contested routes to Asia.
Europe's largest airline in terms of revenues had already
signed up for 100 Airbus short-haul planes in March.
The order for 34 Boeing 777-9X and 25 Airbus A350-900 jets
will reduce Lufthansa's fuel consumption by 25 percent and
shrink unit costs by about 20 percent compared with old models.
"This investment will safeguard about 13,000 jobs at
Lufthansa alone as well as thousands of jobs at our partners in
aviation and other suppliers," Chief Executive Christoph Franz
told a news conference.
Franz's "SCORE" restructuring programme has come under fire
from labour leaders, who say Lufthansa is profitable enough and
does not need cost cuts to help pay for fleet renewal.
But Franz, who is stepping down next May to join Swiss
drugmaker Roche, warned against any let-up in the
restructuring and said his successors would keep to the plan.
"Without the successful implementation of SCORE, we will not
earn the necessary funds to order these planes," he said.
The deal came a day after Air France announced
2,800 fresh job cuts as Lufthansa's rivals also cut overheads,
replace fuel-thirsty planes and streamline back-office work.
"It (the order) is important for Lufthansa to secure its
long-term competitiveness because it will lower unit costs and
replace old fleet," Commerzbank aviation analyst Frank Skodzik
The deal caps a busy week in the shift towards lightweight
jets built from carbon-composites after Bombardier
flew its small CSeries plane on Monday and Boeing began flight
tests of the second version of its 787 Dreamliner, the 787-9.
Lufthansa's first order of the 777 passenger jet is seen a
particular victory for Boeing, which aims to launch the plane
later this year and is working on deals with Gulf carriers.
But the deal also reverses recent successes for two new
models that Lufthansa decided not to buy: the future Airbus
A350-1000 which competes with the 777-9X and the stretched
Boeing 787-10, which will be close in size to the A350-900.
Lufthansa executives said they had rejected the 787-10
because it lacked enough range and the 350-seat A350-1000
because it was too small compared with the 406-seat 777-9X,
which is set to be the largest passenger twinjet ever built.
Boeing said this week it had finalised orders for 10 787-10
from the leasing unit of General Electric and another 30
from Los Angeles-based Air Lease Corp.
Amid continued uncertainty over the economy, Lufthansa said
the deal gave it flexibility to adapt to changing conditions.
Its order for 59 aircraft assumes a 3 percent annual
passenger traffic growth and options on another 30 of each type
of aircraft would support as much as 5 percent growth.
If annual growth is more sluggish than expected at 1
percent, Lufthansa would use the leeway provided by options to
retire more older-generation aircraft.
The industry's latest jets are designed to save fuel and
allow airlines to operate profitably on longer routes with fewer
passengers, a key to opening up new emerging markets.
The Boeing 777-9X will be used for the high-volume routes of
Munich-Shanghai and Frankfurt-Bangkok, while the A350-900 jets
are to be deployed in the mid-sized and niche markets such as
Frankfurt-Vancouver and Frankfurt-Malabo stretches.
Including the aircraft order placed in March this year,
Lufthansa has a total of 295 jets on order with a list value of
36 billion euros, all to be delivered by 2025.
Franz described the order as Germany's largest single