Lufthansa AG has announced that its budget airline Eurowings will switch its focus to short-haul flights in a bid to cut costs by 15% and return to profit to 2021.
The group issued a profit warning on June 16, citing falling revenues at Eurowings as a major reason why the revenue forecast dropped sharply in the second quarter of 2019.
Eurowings, will exclusively utilise Airbus A320, but will no longer focus on long-haul flights, with transfer of this moving toward the Lufthansa group, who will take responsibility.
“With the airlines in our group we are excellently positioned in our home markets, which are among the strongest in the world,” says Carsten Spohr, chairman of the executive board & CEO of Deutsche Lufthansa AG. “Our group’s service companies are also world leaders in their fields. We want to translate this market strength even more consistently into sustainable profitability and value creation.
"And it is to this end that we are presenting concrete actions today which will enhance our efficiency and generate value for our shareholders. Because we don’t just want to be number one for our customers and our employees: we want to be the first choice for our shareholders, too.”
Lufthansa made an adjusted loss of €336 million before interest and tax in the first three months of 2019, compared with an adjusted profit of €52 million in the same quarter last year.