FRANKFURT, July 6 (Reuters) - German airline Deutsche Lufthansa may slash costs by as much as 1 billion euros ($1.4 billion) when it unveils steps on July 30 to contend with slumping demand, analysts said on Monday.
Lufthansa shares were up 2.6 percent at 8.95 euros by 1420 GMT, bucking a 1.5 percent decline in the blue-chip DAX index.
"I have heard from the board level that they will announce cut costs of a very large amount, by up to 1 billion euros," independent airline industry analyst Kurt Hofmann told Reuters.
A spokeswoman for Lufthansa, which has already annouced cuts of 300 million euros, said no further decisions had been taken but it was working on steps that would be made public July 30.
Analysts said a 1 billion euro savings target at Germany's biggest airline was plausible.
"Given that they've already announced cost cuts of 300 million in the passenger business, it is thoroughly realistic that the firm wants to save 1 billion overall," said Equinet analyst Jochen Rothenbacher.
LBBW analyst Per-Olan Hellgren agreed: " Lufthansa said it was cutting capacity because of collapsing demand. It would be possible to cut a billion in costs depending on how much they trimmed capacity."
Metzler bank analyst Juergen Pieper said 1 billion euros seemed high if it was targeted on a single year. "However, a billion spread out over two to three years I could imagine very well," Pieper said.
Hofmann said he expected Lufthansa to move toward shorter working hours in its passenger business, whereas up to now cargo has mainly been affected.
Forced redundancies were unlikely, he said.
"The slump in cargo means that something has got to happen in the logistic area but the red pencil might also be used more in the passenger and maintenance areas," Hoffmann said.
Lufthansa's 300 million euros worth of cost cuts under way include capacity cuts, staff reductions and the phasing out of older airplanes. (Reporting by Alexandra Schwarz and Arno Schuetze; Writing by Jonathan Gould)