German airline Deutsche Lufthansa AG (LHA.XE) Wednesday said it plans to cut capacity 0.2% across the group in 2009 due to dwindling demand for air travel in the global recession.

At its core airline, Lufthansa Passenger Airlines, capacity will be reduced by around 0.5% in 2009, Chief Financial Officer Stephan Gemkow said at the company's annual earnings press conference according to the text of a speech.

The expected decline would be even larger excluding higher flight frequencies and new routes at newly launched Lufthansa Italia. Without the effect from its Italian unit, capacity would fall around 1.4% this year. Including the unit Swiss International, the group's capacity will be reduced by 0.2%, said Gemkow.

Gemkow added that Lufthansa also plans to "intensify and extend" cost cutting measures in 2009 aimed at safeguarding the company's future results.

In 2008, the company launched a EUR250 million cost-cutting program.

Gemkow also lowered Lufthansa's fuel cost estimate for 2009, saying the company will probably require jet fuel worth EUR3.2 billion in 2009.

In January, the company had said this year's fuel bill would be around EUR3.7 billion, considerably lower than the EUR5.4 billion in 2008.

Gemkow said 65% of 2009 fuel requirement has been hedged, based on an oil forward rate of $50.44 a barrel and a euro-dollar exchange rate of $1.26.

He also said Lufthansa intends to spend around EUR3 billion in capital expenditure, half of which will be spent on aircraft and spare parts.

The delivery of Lufthansa's first two superjumbo A380 will further be delayed, Gemkow said, adding that they're now expected to be delivered in early 2010. Lufthansa previously expected to receive the aircraft at the end of this year.

However, "this has no effect on our operating plans, since the two aircraft were only intended to go into service with the start of the summer flight schedule 2010," he said. Apart from the planned acquisitions of Austrian Airlines AG (AUA.VI), U.K.'s British Midland Airways, or bmi, and the purchase of a stake in SN Holding SA, the parent company of SN Brussels Airlines, Lufthansa doesn't currently have plans to maker further acquisitions, Gemkow said.

Company Web site: www.lufthansa-financials.com

-By Jan Hromadko, Dow Jones Newswires; +49 69 29 725 503; jan.hromadko@dowjones.com
Grafico Azioni Spa Marketgrader 200 (NYSE:SNB)
Storico
Da Mag 2024 a Giu 2024 Clicca qui per i Grafici di Spa Marketgrader 200
Grafico Azioni Spa Marketgrader 200 (NYSE:SNB)
Storico
Da Giu 2023 a Giu 2024 Clicca qui per i Grafici di Spa Marketgrader 200