MTU Aero Engines Holding AG, the world's largest provider of jet-engine maintenance, said it is targeting 50 million euros (US$73 million) in savings a year by 2011, and reiterated its 2008 earnings forecast, Bloomberg News reported.

The cost-reduction program, which will focus on production and purchasing, is aimed at keeping MTU on "its profitable growth track even in a troubled market environment," Chief Executive Officer Egon Behle said in a statement yesterday.

Aerospace contracts are denominated in United States dollars. The dollar has declined 11 percent against the euro in the past five years, reducing revenue when converted into the European currency. The exchange-rate shift is driving the need for cost cuts, Behle said in May.

A "concrete road map" for the savings program will be in place by end of the year, with implementation beginning next year, MTU said yesterday.

"It's a positive announcement, but they haven't yet given specific measures, so the market will probably wait to react until they've given more detail in December," said Rupinder Vig, an analyst at Morgan Stanley.

MTU fell as much as 48 cents, or 2.3 percent, to 20.30 euros, and was down 1.8 percent in Frankfurt trading yesterday.

The stock has declined 49 percent this year, valuing the engine-components manufacturer at 1.06 billion euros.

The company will seek 25 million euros to 30 million euros in annual savings with the cost-reduction program. Chief Financial Officer Reiner Winkler said three days ago that net income will total 180 million euros this year.