Cologne - German flag carrier Lufthansa said Thursday it hoped a savings plan would boost earnings over the next two years as it unveiled a sharp slump in operating profit in 2012.
The Cologne-based airline said operating profit dropped 36.1 per cent to 524 million euros (679 million dollars) after earnings were hit by higher fuel costs and intense competition from budget carriers.
This year “will be a particularly challenging year for the companies and their employees,” Lufthansa chief executive Christoph Franz warned.
The Lufthansa group also includes Austrian Airlines and SWISS airlines group.
Lufthansa expects its ambitious restructuring programme - dubbed Score -to boost operating profit to 2.3 billion euros by 2015 and slash 3,500 jobs.
The carrier is also planning a series of new aircraft purchases including two double-decker Airbus A380's.
Score is expected to increase earnings this year by 740 million euros after contributing 618 million euros to group's profit last year.
But a rise in the company's fuel bill from 1.1 billion in 2011 to 7.4 billion euros last year resulted in the fall in operating profit.
Kerosene costs are, however, expected to slip in at 7.2 billion euros this year. - Sapa-dpa