Lufthansa Group continues to make headway with SCORE earnings improvement programme

• More than 2,500 SCORE projects launched • About 800 SCORE projects already implemented • Executive Board plans to close Lufthansa AG’s Cologne head office and the Norderstedt location of Lufthansa Revenue Services GmbH • Lufthansa CityLine considering relocating its head office from Cologne to Munich

One year after the launch of the Group’s earnings improvement programme, more and more SCORE projects are taking shape. SCORE now encompasses more than 2,500 individual projects, about 800 of which have already been implemented. The target has been clearly defined: SCORE aims to increase the Group’s operating result sustainably by 1.5 billion euros by the year 2015.

“SCORE will strengthen the Lufthansa Group,” explains Christoph Franz, Chairman of the Executive Board and CEO of Lufthansa AG. “We need to be strong if we are to make extensive investments for the benefit of our customers and play an active role in shaping change in the airline industry.”

With the aid of more than 500 individual SCORE projects, Lufthansa aims to improve the long-term profitability of its passenger business by 2015. Using new, modern aircraft, for example, will enhance the performance of its long-haul business by 2015. Further measures are also planned to raise efficiency. Amongst other things, Lufthansa is pioneering new approaches with regard to cabin layout, flight planning, MRO and ground processes.

In addition, structures and processes in all ground operations in the Lufthansa passenger business, such as administrative and ground handling procedures, will be examined in detail. With the aid of SCORE, Lufthansa intends to increase its earnings from the passenger business by a total of 920 million euros by 2015, of which 150 million euros will be realised through personnel related measures in Germany and abroad.

“Short decision-making channels and fewer interfaces will make Lufthansa’s passenger business leaner, faster and more flexible,” says Carsten Spohr, member of the Executive Board of Lufthansa AG. “By implementing SCORE we will be able to adapt much faster to changing market conditions and customer requirements.”

Another SCORE project will organise the pooling of administrative activities in the Finance, Procurement and HR areas and introduce more efficient administrative processes throughout the Lufthansa Group. For example, booking and settlement systems used in accounting and ordering procedures in Procurement will be harmonised across the Group. In particular, the Cologne, Norderstedt and Hamburg locations will be affected by changes in the administrative area.

In view of these changes, the Lufthansa Executive Board is therefore planning to close Lufthansa AG’s Cologne head office, which has a staff of about 365, by the end of 2017. Within the same period, the location of Lufthansa Revenue Services GmbH (LRS) in Norderstedt would be wound up. Some 350 jobs will be affected. Eighty per cent of the approximately 200 Group administrative staff employed in the Financial Services unit in Hamburg will be transferred to a specialised service centre. These plans will be discussed over the coming weeks with employee representatives. Within the remit of SCORE, the Lufthansa Group plans to reduce its staffing costs worldwide by 500 million euros.

As part of the restructuring of the regional segment of Lufthansa’s passenger business, Lufthansa CityLine is examining the possibility of relocating its headquarters from Cologne to Munich in the light of considerations to merge Lufthansa CityLine’s administrative headquarters and the airline’s operational base in Munich. About 300 employees would be affected by this move. No decision has yet been made.

“SCORE is on track and is already delivering a substantial contribution to our result,” Christoph Franz stresses. “This also requires us to make difficult decisions, which will have a deep impact on the everyday lives of our staff. But our actions are also guided by a sense of responsibility towards our 118,000 employees worldwide. The measures we are taking will enable us to create the basis for sustainable growth, employment and job security in the long term.”