Lufthansa plans to slash staff costs by €500 million

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Lufthansa will close its administrative facilities in Cologne and Hamburg, and plans to move the headquarters of its regional CityLine subsidiary to Munich as part of the carrier's 'Score' efficiency improvement programme.

Revenues at the German airline group increased nearly 5% to €30.1 billion ($40.2 billion) in 2012, but operating profit was down 36.1% to €524 million compared with the previous year.

Although the carrier posted a group net profit of €990 million - following a €13 million loss in 2011 - chief executive Christoph Franz cautioned that the result was largely due to one-off effects from selling off certain shareholdings. He added that the result should "must not mislead us into disregarding the pressure to act [to improve profitability]".

Management has decided to close Lufthansa's official headquarters in Cologne until 2017, with the loss of 365 jobs. The company has officially been based in the city since it was re-established after World War 2 in 1953. But large parts of the administration - including the senior executive team - were moved to the operational base in Frankfurt several years ago.

Lufthansa will also close its revenue accounting centre in Norderstedt, near Hamburg, and restructure a financial services division in Hamburg's city centre. Closing the former facility will lead to 350 job cuts, while 80 employees of the latter's 200 staff members are to be transferred to a "specialised service centre".

The group wants to slash staff costs by €500 million worldwide, of which €150 million are to be cut within Lufthansa's passenger airline.

Management is also evaluating whether to relocate the headquarters of its Lufthansa CityLine regional subsidiary from Cologne to Munich, where much of the operations are centred. The move would affect 300 jobs, but the company insists no final decision has been taken.

Lufthansa wants to bundle administrative activities of the finance, procurement and human resources departments across the group as part of its 'Score' efficiency programme, which aims to save €1.5 billion until 2015 through cost-cutting and revenue improvement initiatives.