Lufthansa to form Premium Service & No-Frills Groups to Fend Off ME & Low Cost Carriers

In case you missed the announcement last month, Lufthansa plans to organize into two separate units in order to more effectively counter the double threat from ME carriers and low cost competitors. One group will be focused on premium services, while the other will be all about intra-European low fares. The hub group will include Lufthansa, Austrian, and Swiss while the budget group will include a combined Eurowings / Germanwings. The changes will result in 150 job cuts. CEO Carsten Spohr had this to say:

“Our new group organization should make us more efficient and more responsive.  Cutting one management layer is something that won’t be met with cheers from within the company, but is necessary to make us faster.”

Sphor reminded investors that the airline recently completed renovations of its long-haul business cabin with the hopes of improving performance for the premium group.

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