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$19 BILLION DEALS

Lufthansa orders 59 new planes

Frankfurt, September 20, 2013

Deutsche Lufthansa unveiled a $19 billion order for new jets on Thursday as its outgoing chief executive warned the historic investment must not dilute the resolve of Europe's largest airline to stay in the black.
 
The deal for 59 new jets, split between Boeing and Airbus, will see the German flag carrier launch a new and larger version of Boeing's 777 long-range jet.
 
Lufthansa is in the middle of a dramatic revamp that includes 3,500 job cuts, at the same time as investing in modern jets to cut its fuel bill and catch up with deep-pocketed Gulf rivals, particularly on hotly contested routes to Asia.
 
Europe's largest airline in terms of revenues had already signed up for 100 Airbus short-haul planes in March.
 
The order for 34 Boeing 777-9X and 25 Airbus A350-900 jets will reduce Lufthansa's fuel consumption by 25 percent and shrink unit costs by about 20 percent compared with old models.
 
"This investment will safeguard about 13,000 jobs at Lufthansa alone as well as thousands of jobs at our partners in aviation and other suppliers," chief executive Christoph Franz told a news conference.
 
Franz's "SCORE" restructuring program has come under fire from labor leaders, who say Lufthansa is profitable enough and does not need cost cuts to help pay for fleet renewal.
 
But Franz, who is stepping down next May to join Swiss drugmaker Roche, warned against any let-up in the restructuring and said his successors would keep to the plan.
 
"Without the successful implementation of SCORE, we will not earn the necessary funds to order these planes," he said.
 
The deal came a day after Air France announced 2,800 fresh job cuts as Lufthansa's rivals also cut overheads, replace fuel-thirsty planes and streamline back-office work.
 
"It (the order) is important for Lufthansa to secure its long-term competitiveness because it will lower unit costs and replace old fleet," Commerzbank aviation analyst Frank Skodzik said. - Reuters



Tags: Lufthansa | planes | deal |

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