FRANKFURT, Germany: Lufthansa will announce several thousand job cuts on September 29 as part of a sweeping efficiency drive aimed at regaining investor confidence, two sources familiar with the matter said.

The move will be unveiled at the airline's first company-wide capital markets day in six years. Shares in Lufthansa, Europe's largest airline by sales, rose 3.4 percent to a three-week high after news of the planned cuts broke. By 1423 GMT, they were still up 1.7 percent.

The group has faced mounting criticism from investors and analysts for its high costs and sluggish turnaround, having twice issued profit warnings in 2024. A goal of hitting an 8 percent operating profit margin by 2025 was pushed back, further denting credibility.

CEO Carsten Spohr told employees in a town hall meeting on September 26 that Lufthansa must streamline its operations to secure future investment. "All this will require us also to become leaner in admin because we cannot afford to maintain our work at the cost that we have now because we don't have the margins to invest," he said. "And in our industry, without modern technology, you have no chance."

The company plans to reduce administrative staff by about 20 percent over the coming years, according to two sources. While the precise number of redundancies has yet to be finalised, cuts will extend beyond the core Lufthansa airline to the broader group, a third source said. Lufthansa declined to comment.

The restructuring comes amid labour tensions, an unresolved pension dispute, and the threat of a pilot strike. Analysts expect these issues to weigh on the investor event in Munich on September 29.

"Despite having fewer planes, and even less flying activity, than in 2019, the airline business employs seven percent more people," brokerage Bernstein noted in a preview of the event, saying investors would want proof that Lufthansa can run a leaner operation.

Executives are counting on greater flexibility from newer subsidiaries such as Discover and City Airlines, which have lower-cost labour agreements compared to the more rigid contracts at Lufthansa Classic. By reallocating resources toward these newer units, the group hopes to improve margins and competitiveness.

Still, analysts say the company will need to demonstrate near-term progress rather than relying on mid-term promises. "Analysts may also look for assurance that Lufthansa is still on track for its 2025 guidance for a significant increase in adjusted EBIT," said RBC analyst Ruairi Cullinane.