Mar 13 - Germany's largest airline says it's confident of reaching the goals set out under a restructuring programme after better-than-expected quarterly profit. Joanna Partridge looks at how Lufthansa has managed to turnaround its fortunes so quickly.
Lufthansa's reaping the rewards of its restructuring. It's reported better than expected operating profit, and a dividend payout is winging its way back to investors. This turnaround has given executives at Germany's largest airline plenty to smile about. Lufthansa says the improvement is down to its SCORE programme. Christoph Franz is Lufthansa's CEO. SOUNDBITE: Christoph Franz, Lufthansa CEO, saying (German): "The firm's restructuring, if you want to call it that, or the continued development of the Lufthansa Group was built on sustainable measures from the outset. In this respect, Lufthansa is well-placed. We are at cruising altitude, but that doesn't mean that we can now stop climbing. We have to keep developing, that's clear. But I believe Lufthansa, which is the market leader in Europe, is in an above-average situation which should allow us to be successful in the future." Some measures included in SCORE are expanding its low-cost carrier Germanwings and introducing premium economy on its Lufthansa long-haul flights. It also brought job cuts. That made SCORE unpopular with Lufthansa staff, who have gone on strike several times over the past couple of years. But the tough medicine seems to be working. Lufthansa and Germanwings increased operating profits by 240 million euros to 265 million in 2013. Investors pushed Lufthansa shares around 5% higher on the news. The carrier has also set itself some tough targets. It aims to increase operating profit by 1.5 billion euros compared with 2011. And is confident it can meet that goal But the success of SCORE doesn't guarantee there won't be a bumpy ride ahead. While the economy is improving, competition remains tough.