German flag carrier Lufthansa's freight division, Lufthansa Cargo, is to shed 10% of its staff by 2006 in response to the need to cut costs in the face of tough market conditions.
It is planning to shed the equivalent of 480 positions following a string of disappointing financial results. Lufthansa Cargo has seen revenues decline since 2000, when they were above €2.5 billion ($3 billion), and the company has struggled to make a pre-tax profit in three of the past five years.
The company is expecting to be profitable this year after cutting first-half losses and aims to achieve a profit of €233 million by 2006 as a result of the restructuring. Most of the job losses will come from administrative sectors within the company. Around 150 jobs will be shed by the end of this year, it says, through "normal fluctuation". Lufthansa Cargo chairman Jean-Peter Jansen says the "extremely volatile" market environment and "aggressive" competition - along with currency effects - have prompted the adjustments.
DAVID KAMINSKI-MORROW / LONDON
Source: Flight International