Lufthansa update

German airline Lufthansa said last week that it is sticking to recently revised full-year profit targets and planning to boost its operations in the low-cost sector.  The airline issued a statement noting that despite the investment needed for a raft of new strategic measures, it "remains confident of its revised business projections for 2014 and 2015. (see also Boeing delivers its 1,500th 747)

"The executive board expects to report an operating profit of around €1bn for the current year."  It had previously cut its earnings targets for this year and next year citing disappointing developments in passenger and freight business, and financial fallout from strikes.  To meet these new targets the airline will scale back the planned expansion of its passenger traffic capacity, withdraw a number of aircraft and cut its freight capacity, the statement explained.

Lufthansa also unveiled plans to beef up its presence in the low-cost sector.

"In the dynamic and highly price-sensitive market segments, our current platforms only enable us to exploit the growth potential to a limited extent, in view of their sometimes over-rigid cost structures," said Carsten Spohr, the new Chief Executive.

"That's why we are now seeking to tap new growth areas."  Quite where Germanwings, its budget operation, sits in the plans remains to be seen. www.lufthansa.com

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