May 13, 2014 / 1:05 PM / 3 years ago

Lufthansa plans ground staff outsourcing to cut costs

FRANKFURT, May 13 (Reuters) - Lufthansa, Europe's largest airline by revenues, is planning to transfer some 1,500 ground staff at German airports into separate companies this year as part of cost-cutting measures.

Germany-based Lufthansa is trying to improve its profits by 1.5 billion euros ($2 billion) in 2015, compared with 2011, under its SCORE restructuring programme.

Measures range from expanding its low-cost unit Germanwings and shortening plane turnaround times at airports, to cutting a total of 3,500 back office jobs and even auctioning off business class seats.

A spokesman said on Tuesday that Lufthansa planned to transfer employees working at check-in desks and ticket sales counters in airports like Berlin, Hamburg, Duesseldorf into separate companies.

The new separate companies would then have to compete with third-party providers for Lufthansa contracts. That could help Lufthansa to reduce its costs at medium-sized airports and thus better fend off increasing competition from low-cost rivals such as Ryanair and easyJet.

Lufthansa's ground services can cost it up to 5 euros per passenger, compared with around 2 euros for low-cost rivals.

Union Verdi criticised the plans, saying a similar plan at Lufthansa catering unit LSG Germany had resulted in lower pay and worse conditions for staff.

The union said it would be calling meetings with Lufthansa staff and would fight to stop the airline reducing pay or closing sites.

Lufthansa's main hubs in Frankfurt and Munich are not affected by the plans. ($1 = 0.7270 Euros) (Reporting by Peter Maushagen; Writing by Victoria Bryan)

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