Lufthansa, the Germany-based airline, is considering cost savings through several measures, and may reintroduce its premium economy class of seating.
In a letter addressed to the company employees, Carsten Spohr, a member of the airline company’s board, said that the company is aiming to achieve €1.5 billion in savings through several cost cutting initiatives. One such initiative is removal of first class on several routes and the reintroduction of premier economy class on some routes.
Spohr emphasised in his letter that the company is in difficult phase, and is affected by issues such as air traffic control, carbon emissions, the ban on night flights, and competition from low-cost airlines. The company is planning to cease passenger capacity expansions in 2012, and has withheld all plans to upgrade its intercontinental fleet, Spohr added. The company is also looking at job cuts and to negotiate airport fees, in order to lower the costs.
In 2011, the Lufthansa Group reported a loss of around €13 million, and recently the company sold off its subsidiary, bmi, British Midland International, airline to International Airlines, the parent company of UK-based airline company, British Airways.
In an interview with Bloomberg Businessweek, Andreas Bartels, a Lufthansa spokesman in Frankfurt, said, ‘Everything will remain just as it is for customers, there is Lufthansa and Germanwings. But duplicated functions such as bookings control, route planning and ticketing can be merged behind the scenes to save money.’
The company also owns Austrian Airlines, which reported an operating loss of €62m in 2011.