Interesting AFX from Lufthansa cargo this morning:
Lufthansa Cargo plans new cost saving measures
FRANKFURT (AFX) - Deutsche Lufthansa AG's freight subsidiary Lufthansa Cargo
is planning a second round of cost saving measures, Financial Times Deutschland
said, citing marketing board member Andreas Otto.
Otto said the company's production costs "are no longer competitive" and "we
have to tackle these once more."
Last year, Lufthansa Cargo launched its cost-saving initiative which aimed
to improve earnings by 233 mln eur annually from next year.
Otto said prices in the industry have become stable and overall demand has
risen strongly recently but the company would still have to cut costs.
Lufthansa Cargo is expected to grow in line with industry trends, which
foresee a 6 pct annual growth until 2010, he added.
Otto also said a decision on fleet modernization would be taken in the next
two to three years.
For the first nine months of this year, Lufthansa Cargo achieved an
operating profit of 45 mln eur compared with 5 mln in the same period of last
year. Sales rose by 9.5 pct to 1.9 bln.
He said there are currently no plans for Chinese partner Jade Cargo to
absorb some of Lufthansa Cargo's flights but he would not rule out this option
completely. Lufthansa Cargo owns a 25 pct stake in Jade Cargo.