Lufthansa warns of 'drastic cuts'

Lufthansa is carrying 30,000 fewer passengers daily

German flag carrier Lufthansa has become the latest airline to warn staff of a dire trading outlook following the 11 September attacks.

"Drastic cost cuts in all areas, including personnel costs, are necessary," a member of Lufthansa's board, Wolfgang Mayrhuber, said in an interview with the airline's in-house newspaper, Lufthanseat.

If the cost-cuts are not achieved, "in the passenger business alone, we would have to give up every fourth or fifth job", he added.

Mr Mayrhuber's remarks came as Lufthansa began talks with trade unions, and are being seen as a bargaining chip to help achieve rapid cost-cuts.

Other carriers, most notably United Airlines, have also been brutally frank with staff in the past few weeks.

Talks deadlocked

Lufthansa chiefs have proposed a number of shake-up options for discussion, including the introduction of a four-day week, part-time working, and cuts in wages and bonuses.

On Friday, German pilots union Vereinigung Cockpit said that the first day's discussions with Lufthansa had ended without a result.

"They made a couple of proposals, but they all have to be evaluated," said Cockpit spokesman Georg Fongern.

He said a date had not been set for further talks and declined to give details on exactly what form the proposals took.

Deep cuts

Mr Mayrhuber was uncompromising in his language.

He told Lufthanseat that the situation the airline was facing was "even more dramatic than we had been expecting a few weeks ago and it is becoming increasingly critical.

"We're lacking some 30,000 passengers every day. Furthermore, business-class passengers are opting to fly economy class.

"Currently, we are losing around 50m euros a week in our passenger division alone compared with the period prior to 11 September."

On the Frankfurt stock exchange, Lufthansa's shares stood 3.3% lower at 11.70 euros in lunchtime trade.