Lufthansa details savings from Germanwings route transfer

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Lufthansa foresees lower cabin-crew and airport costs being the biggest drivers of savings as it transfers European flights to low-cost subsidiary Germanwings.

The mainline carrier targets cost cuts of €200 million ($262 million) from shifting all European flights outside the hubs in Frankfurt and Munich to Germanwings by 2015.

Yields are not expected to improve as a result of the route transfer. But Lufthansa will increase capacity around 15% by switching services to the low-cost carrier's Airbus A319-based fleet.

However, it expects the biggest savings in the areas of cabin-crew and airport costs. Cabin-crew costs are expected to be 30% below the mainline carrier's level, says Lufthansa in today's update on its "Score" efficiency programme. The savings in airport expenses could be even higher.

Pilot and maintenance expenses are to be 15% lower than at the mainline carrier. MRO costs will fall thanks to the phase-out of Lufthansa's ageing Boeing 737-300/500s and economies of scale arising from Germanwings' expanded fleet.

Lufthansa expects a €740 million gross contribution from the "Score" programme this year. Last year, the figure was €618 million.

This year's operating result will also be affected by a restructuring cost "similar" to the €160 million of redundancy payments and provisions incurred last year, plus a fourth-quarter, "low three-digit million euro" project cost relating to "fleet rollover and product enhancement".