Lufthansa's 102-Airbus-Jet Order Centered Around New Fuel-Efficiency Program

With fuel costs continuing to climb across the board, the airline industry is taking a big hit, but to try and stem the tide, German-based Lufthansa ordered 102-Airbus jets that they claim will improve fuel efficiency of its fleet by allowing the company to replace older aircraft with newer, more fuel-efficient models.

Lufthansa said on Tuesday that "fuel costs rose 18 percent in 2012 to 7.39 billion euros, which it sees declining to about 7.2 billion euros this year. Staff costs rose 5.6 percent to 7.05 billion euros, while fees and charges increased by 3.3 percent," according to Bloomberg News.

According to USA Today, the details of the order include the acquisition of 100 Airbus A320-family jets and two A380 super-jumbo jets.

Bloomberg News added "of the new aircraft, 70 will be A320neo and A321neo models, while 30 will be equipped with the current engine option, the company said in a statement today."

This move comes off the heels of the airline's most ambitious efficiency push ever, seeking 2.3 billion euros in operating profit by 2015, according to Bloomberg News.

Lufthansa, which suspended its dividend payout for 2012 to help finance the planes, predicted today that net income will drop this year, and that it's unclear if the company can achieve free cash flow.

"2013 and 2014 will be tough years of implementation and the continuation of the restructuring process," Chief Executive Officer Christoph Franz said, according to a speech handed out to journalists ahead of the company's annual press conference at Frankfurt airport today, reported by Bloomberg News.

With this order, Europe's second-largest airline becomes Airbus's largest airline operater worldwide.

However, Franz did tell German-based news station, DW "the fleet will not grow significantly in coming years, and Lufthansa will remain 'restrictive' in its offering, adding just 1 percent capacity this year. That's down from an earlier goal of 1.5 percent capacity growth. While the short-haul offering will be reduced by 2.6 percent, long-haul capacity will rise 2.9 percent."