Four offices shut down (200 words)

Published: 9/15/2000

According to reports from Vilnius, Lithuanian flag carrier, Lithuanian Airlines, is closing four of its eight representative offices in Frankfurt, Warsaw, Stockholm and Paris as part of a general plan to cut costs. This includes the loss of 240 jobs at the heavily indebted carrier, that currently employs 1100 people. The airline borrowed $7.5m in July to make up for a significant shortfall in working capital. The office closures are expected to save the airline $1.25m a year and, according to a local newspaper, will be used to cover losses elsewhere in the airline's business. Contracted local representatives will provide the coverage currently provided by the airline's own offices. Recently, the airline has seen something of an upswing in the summer period, with July passenger numbers up by 29%, having increased by 10.3% in the first quarter of 2000, although still generating losses of $3.5m. It is unclear what impact this cost cutting exercise may have on the ongoing efforts to privatise the airline by selling it to a strategic buyer, but the assumption is that a slimmed down restructured airline would be more attractive to an incoming buyer. Associated articles Passengers still increase for Lithuanian Airlines 14th August 2000 Record numbers of passengers for Lithuanian Airlines 12th July 2000 Lithuanian Airlines plans loan 3rd July 2000

Article ID: 2075