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Lufthansa May Replace 747-400s With Twin-Engine Aircraft

June 3 (Bloomberg) -- Deutsche Lufthansa AG Chief Executive Officer Christoph Franz said Europe’s second-largest airline may replace its residual fleet of Boeing Co. 747-400 jumbos with twin-engine jets as it looks to cut fuel costs.

The replacement of about 13 747-400s would take place next decade when it would make sense to buy twin-engine jets that are more fuel efficient, Franz said. Lufthansa is a user of the four-engined Airbus SAS A380 superjumbo and Boeing 747-8.

Airlines are reviewing their long-distance planes, and Lufthansa operates one of the largest fleets of A340s that Airbus has stopped making because it lacks the fuel efficiency of competing models. The Boeing 777-9X the U.S. manufacturer is considering from the end of the decade would have almost the seat count as a jumbo and would be a candidate, Franz said.

Lufthansa already is in advanced talks with Airbus and Boeing to buy about 50 long-haul planes to replace its A340 fleet, with a selection due by year’s end, Franz told reporters at the International Air Transport Association’s annual general meeting in Cape Town. The planes will span 250 to 350 seats, he said.

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The airline is considering buying the Boeing 787-10X, which Singapore Airlines Ltd. last week said it would buy if the Chicago-based aircraft maker commits to building the plane, Franz said. The 787-9 is also a candidate along with the A350-900 and larger -1000 from rival Airbus, he said. Lufthansa has previously said it may buy all planes from one producer.

Franz said the aircraft makers shouldn’t over-design their planes to appeal to Middle East carriers at the cost of others.

“We are seeing that the airplanes are very highly powered and are being designed for long-range that is longer than the established U.S. and European carriers would require,” Franz said.

Lufthansa is replacing older, less fuel efficient planes as it also implements the “score” efficiency program, a cost cutting initiative to lift operating profit to a record 2.3 billion euros ($2.99 billion) by 2015. That program is showing “good progress,” Franz said today.

The CEO said he is now open to a tie-up with a Middle East carrier after Lufthansa previously eschewed such links. The European airline group is not actively pursuing cooperation, he said. However, as Middle East carriers modify their strategies and seek ties with more established airlines, Lufthansa would consider participating, he said.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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