Lufthansa’s Swiss Unit Plans to Beat 2015 Savings Target

Deutsche Lufthansa AG (LHA)’s Swiss International airline division will beat its goal for cost savings and revenue increases in 2015, the unit’s chief executive officer said.

Earnings improvements will exceed 180 million Swiss francs ($198 million) in 2015 as reorganization measures offset headwinds from rising fuel costs, Harry Hohmeister, the head of the brand, said at a business event in Geneva. That compares with a 160 million-franc target set by the CEO for Swiss in January, a goal already raised 40 percent from a figure laid out last year in Lufthansa’s so-called Score profit-revival project.

“The Score program is running very, very well in Switzerland,” he said, adding that earnings improvements this year will total 74 million francs. Swiss’s employees “are much more innovative than we as managers thought.”

Hohmeister has run Swiss since 2009 and was promoted to Lufthansa’s management board on July 1. He’s pushing for more savings to fight rising kerosene costs and margin pressure on flights serving Asia. Prices on Asian routes in September fell because of “persistent weakness” in the region, Cologne, Germany-based Lufthansa said today.

Lufthansa Chief Executive Officer Christoph Franz said yesterday that he’s prepared to revisit the Score program should some of the initiatives prove insufficient to turn around the airline, Europe’s second-biggest.

Swiss plans on a third consecutive annual record in passenger figures in 2013 after transporting 15.8 million travelers last year, Hohmeister said.

Nine-month passenger numbers rose 1.1 percent to 12.2 million as seat occupancy increased 0.9 percentage point to 84.4 percent, Swiss said separately. Lufthansa reported a 0.6 percent gain in group passenger numbers to 79.8 million, with the seat load factor rising 1 percentage point to 80.3 percent.

To contact the reporter on this story: Thomas Mulier in Geneva at tmulier@bloomberg.net

To contact the editor responsible for this story: David Risser at drisser@bloomberg.net

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