October 3, 2013 / 7:05 PM / 4 years ago

Lufthansa confirms breakeven goal for low-cost Germanwings

FRANKFURT, Oct 3 (Reuters) - Lufthansa’s budget airline Germanwings is on track to meet its breakeven target in 2015 compared with a loss of 200 million euros ($272.47 million) in 2012, according to the company’s website on Thursday.

Europe’s biggest airline by sales launched a re-branded Germanwings in July this year as part of attempts to cut costs and win back passengers from no-frills rivals.

Lufthansa shut its short-haul non-hub business in January because it had been losing money, mainly due to competition from budget airlines EasyJet, Air Berlin and Ryanair.

Based on presentation slides to be shown to investors on Friday and released by Lufthansa on Thursday, Germanwings is expected to improve earnings by some 90 million euros this year.

The expansion of Germanwings is a major part of Lufthansa’s three-year restructuring programme, called SCORE, which aims to boost Lufthansa group’s operating profit to 2.3 billion euros by 2015, up by 1.5 billion euros compared with 2011.

SCORE also plans to invest heavily in refitting Lufthansa’s long-haul fleet and in product upgrades, such as new premium economy seats.

According to the slides, the product upgrades will incur one-time additional costs of 120 million euros this year, 300 million euros next year and less than 100 million in 2015.

$1 = 0.7340 euros Reporting by Marilyn Gerlach; editing by David Evans

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