LUFTHANSA HAS acknowledged that its profits over the first six months of the year are likely to be virtually halved, although chairman Jurgen Weber remains bullish that full-year profits can still be maintained.

The profits forecast, which comes in the wake of mounting speculation over the carrier's performance, admits that pre-tax earnings for the first half will come in at around DM100 million ($65 million). A year ago, the figure had been DM189 million.

Weber admits that the airline has had a "rough ride", with the Dusseldorf Airport fire and aggressive price competition adding to the effects of a weak German economy. Profit targets remain in place for the full year, however.

He stresses that corrective action has been taken. The passenger airline has begun a programme designed to cut unit costs by 20% over the next five years.

Lufthansa Cargo, which became a separate business in 1995, is understood to be struggling to stay in profit, and has launched another "extensive" programme to cut costs and boost sales.

Source: Flight International