Leading German charter airline LTU International Airways is embarking on an extensive restructuring programme, including plans to drop selected long-haul routes and to stop operating McDonnell Douglas MD-11 tri-jets.

The restructuring plan aims to combat a sharp drop in profits, which LTU suffered in the financial year 1995/6. The carrier plans to cut capacities by 11%, rationalise the fleet and concentrate on lucrative Mediterranean destinations at the expense of competitive routes such as those to Acapulco in Mexico, Los Angeles and San Francisco. The airline will also drop its internal German network, which will result in an annual saving of DM30 million ($17 million).

The airline's four 408-seat MD-11s will be phased out during 1998, and will be replaced by two additional Boeing 757s and one 767-300ER, which may be bought or leased. By the third quarter of 1998, the restructuring will leave LTU with six Airbus A330s (387 seaters), as well as 15 Boeing 757s and six 767s.

The airline plans to increase the number of direct long-haul flights, primarily during its winter season when demand on the Mediterranean routes drops. The restructuring comes on top of existing plans to merge LTU and Munich-based LTU Sud by the end of the year.

Passenger traffic in 1995/6 increased by 3.6%, compared with the previous business year, to 6.9 million, but pre-tax profit still fell by 13.7% to DM126 million, due to the increase in fuel costs.

Source: Flight International