BERLIN, Feb 23 (Reuters) - Lufthansa isconsidering shifting some of its Embraer jets to itsAustrian Airlines unit as replacements for the carrier's ageingfleet of Fokker regional jets.
Lufthansa is trying to cut costs to compete better withfast-growing Gulf carriers and low-cost rivals such as Ryanair and easyJet and last week told staff thatexpansion of its core business depends on cost cuts.
In an internal letter to staff this month Lufthansa that itwas examining how and where its regional Embraer fleet,currently in use at its CityLine unit, could be deployed in themost cost-effective manner
"Given the higher unit costs incurred by this aircraft typecompared, for example, with the (Airbus) A320, we urgently needto revise its operational scope," the airline said in the memo.
Austrian Airlines currently operates 21 Fokker regional jetsand is looking to replace them by 2018 or 2019.
It had looked at buying Bombardier's CSeriesaircraft, but parent Lufthansa has now given it a new optionwith the possibility of taking some Embraer 195 jets fromCityLine, a spokesman for the Austrian carrier said on Monday.
Both Austrian Airlines and parent Lufthansa said no decisionhad yet been taken.
Austrian's sister carrier Swiss has ordered 30 CSeries jetsfrom Bombardier, which this month said it needed to raise $2billion in new debt and equity as it revealed more cost overrunsin the CSeries programme.
Lufthansa said in its internal letter that its aim is tokeep as many jobs as possible at CityLine by using CRJ900aircraft that are being replaced by Airbus A320s at itsEurowings business.
(Reporting by Victoria Bryan; Editing by David Goodman)