December 4, 2012 / 11:06 AM / 5 years ago

Lufthansa plans cost cuts at long-haul business

FRANKFURT (Reuters) - German flagship airline Deutsche Lufthansa said it needs to cut costs at its profitable long-haul business to cope with rising fuel prices and stiff competition from Gulf carriers.

An aircraft of German air carrier Lufthansa stands in front of the newly built A-Plus terminal section at the Fraport airport during a guided media tour in Frankfurt September 28, 2012. REUTERS/Lisi Niesner

Lufthansa said in an employee newsletter distributed on Monday that it aims to reduce unit costs at its long-haul business by 10 percent by 2015 and by 20 percent by 2025, compared with 2011.

“Lufthansa is booking increasingly large declines in income on long-haul routes, even on trunk routes such as Beijing of Shanghai,” it said.

The new savings project, dubbed SPRINT, is part of a company wide plan to improve annual earnings by 1.5 billion euros by the end of 2014.

Lufthansa has already frozen investments, announced job cuts and is combining its loss-making European short-haul unit with its low-cost carrier Germanwings.

SPRINT will focus on lowering fuel expenses and re-negotiating pricey contracts with suppliers but will also examine possible measures related to infrastructure, crew, fleet planning, cabin layout and ground processes, Lufthansa said. (Reporting by Maria Sheahan; Editing by Louise Heavens)

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