Lufthansa heads for low-cost model

(AFP/ JOHN MACDOUGALL)

Struggling German flag carrier Lufthansa is poised to adopt elements of the "low-cost" business model, especially on its European routes, deputy chief executive Christoph Franz said on Tuesday.

Among the measures under consideration are a change in the catering policy, reducing the space reserved for kitchens - in an effort to drive down prices to compete with the likes of easyjet and Ryanair.

Lufthansa, which said last month its nine-month operating profit had plunged by more than 75 percent "will take over some elements of the low-costers in some areas," Franz said.

However, he stressed that food and drinks would still be free on Lufthansa flights. Making customers pay for refreshments "does not work with a premium brand," said Franz.

Lufthansa has introduced sweeping measures to drive down its unit costs but 2010 will nevertheless be a "difficult" year for the airline, the deputy CEO said.

"We are able to sell enough tickets but we are not in a position to raise prices. And frankly, I do not see any trend towards a sustainable improvement," he said.

Lufthansa has said it will stay in the black this year but has stressed that this outlook "remains subject to very considerable risks."

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