FRANKFURT (Dow Jones)--Deutsche Lufthansa AG (LHA.XE) Thursday said it plans to sell unprofitable business units and boost its low-cost segment in response to increasingly tough competition from no-frills carriers and amid waning demand due to economic uncertainty.
"We shall withdraw from loss-making units without a reasonable turnaround perspective," Chief Executive Christoph Franz says according to the draft text of a speech he will make later Thursday morning.
Lufthansa is weighing up options for loss-making British Midland Airways, or bmi, as well as its Chinese logistics joint venture Jade Cargo, according to the draft.
Other non-core operations, such as the information technology unit Lufthansa Systems, could also be sold, Franz said.
Lufthansa has previously said it is looking for partners for its IT unit and people familiar with the matter have said that the company has hired banks to prepare a sale of bmi.
The German flagship airline also Thursday said that it plans to expand its Germanwings low-cost passenger business in an effort to improve profitability of its loss-making short-haul traffic in Europe.
"We must improve profitability on the short-haul routes. We must achieve a cost position in European traffic that can compete with the low-cost carriers in order to remain profitable overall," CEO Franz says in the draft.
Lufthansa Eyes Asset Sales, Plans To Boost Low-Cost Segment -
WSJ.com