Lufthansa ‘considering sale of catering unit’

Lufthansa is planning to offload its catering unit LSG Sky Chefs just days after pulling out of a deal to purchase the catering operation of a rival European airline, according to local newspaper reports.

The Financial Times Deutschland claims the move to sell LSG is at an advanced stage, with up to 49% of the unit to be sold within the next 12 months, ideally to a strategic partner in the catering industry. It said LSG Sky Chefs is the world’s biggest onboard caterer.

Last week Lufthansa cancelled a buy-out of the catering operations of rival European airline Finnair due to current cost-cutting measures.

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“Finnair will now concentrate on improving the profitability of its catering unit, which prepares meals served in flight,” Finnair’s customer service chief Anssi Komulainen was quoted as saying. “At the same time we will continue to evaluate alternate arrangements.”

Finnair had agreed to sell the unit as part of a cost reduction programme. Last year its catering unit generated sales of EUR80m (£65m) and employed around 850 people.

The sale would have helped the company to achieve its goal of slashing expenses by EUR140m (£114m) over the next two years, although it claims the cancellation of the deal has not put that schedule off track.

The Financial Times Deutschland, meanwhile, said Lufthansa is presently conducting its own internal restructuring and cost-cutting programme aimed at improving the company’s operating result by at least EUR1.5 billion (£1.2 billion) in the next two years.

A Lufthansa spokesman reportedly told the newspaper that the company is currently looking at several options to find ways to increase competitiveness, but said no firm decisions had been made.

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