Air company should be healthy economically: Lufthansa Regional Director

Business Materials 14 August 2009 14:25 (UTC +04:00)

Azerbaijan, Baku, Aug. 14 / corr Trend E.Ismayilov /

Lufthansa has always calculated its expenses and profits and seeks ways to reduce expenses despite problems emerging over the past few years, including avian flu and swine flu, the international financial crisis, as well as the hike in fuel prices, Lufthansa Regional Director for Russia and the CIS Ronald Schultz told Trend in Baku.

Many world companies are using state subsidies in view of the international financial crisis to remain in business. However, Lufthansa will never take one, because the company has fought against state interference since the very moment of its establishment, Schultz said. "An air company should be healthy from the economical point-of-view."

Mainly Russian companies are in need of state support, because they are always appealing for financial support from the government, Schultz said.

"Lufthansa has set up a program for expense cuts. We want the company to cut its expenses by 1 billion euro a year by the end of 2011. Therefore, we have ambitious plans for the future," Schultz added.

This year the company plans to acquire 53 new airliners worth 1.5 billion euro. In the subsequent years it has planned to purchase 160 more airliners, paying independently. These are the Airbus- 340, Airbus-350, Boeing-777, as well as other small airliners. Some 80 percent of the company's air fleet is its own airliners and the other 20 percent are airliners taken on lease.

The crisis will not result in a monopoly by big air companies as a result of the smaller ones going bankrupt, Schultz believes. "Germany has many air companies which were faced with the threat of bankruptcy and they function well along with our company, but they have another niche," Schultz said.

Now passengers want to buy tickets at lower prices. If earlier the company considered bigger companies as rivals, now Lufthansa is studying smaller companies which offer lower prices. These air companies mainly offer short flights within European territory. Another rival is the United Arab Emirates, offering lower prices thanks to state support and low fuel prices.

Since the beginning of the international financial and economic crisis the company lowered the price of air tickets by 20 percent.

Under the agreement, Lufthansa makes flights to Azerbaijan four times a week at present. The company also has a flight through Azerbaijan and Turkmenistan.

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