Source: Reuters Author: Maria Sheahan 06/25/2009
Subject Concerned: Airlines
German airline Deutsche Lufthansa said demand for economy class air tickets had been stabilising over the past few months as premium travel continued its nose dive.
To cope with weak bookings, Lufthansa has so far this year cut the number of seats it offers at its passenger airlines by 2.6 percent, the German flagship carrier said in a presentation to be held at its Investors Day on June 25.
It has retired 23 short- and long-haul airplanes and plans further capacity reductions this year. Lufthansa's total fleet comprises 545 aircraft, including cargo planes.
Airlines around the world are struggling to cope with a drop in demand for air travel amid the global economic crisis. The International Air Transport Association (IATA) has forecast that the world's airlines are likely to lose US$9 billion this year.
Lufthansa has reported a 4.4 percent decline in the number of passengers it carried in May, with a load factor that narrowed by 4.4 percentage points. Load factor is a measure of capacity utilisation.
The company last week warned that it would not be able to post an operating profit as planned this year without further cost cuts given difficult markets.
Around EUR300 million (US$422 million) worth of cost cuts are already underway, by way of measures such as further capacity cuts, staff reductions and the phase-out of some older airplanes, the presentation showed.
Shares of Lufthansa rose 2.6 percent to EUR8.86, while the German blue-chip index was down 0.7 percent.