The Lufthansa Group has decided to hold liquid funds of between EUR 8bn and EUR 10bn in future to protect against possible crises. The minimum liquidity level was increased again in view of the significant expansion of business activity. For capital efficiency reasons, part of the strategic liquidity reserve is held in the form of a revolving line of credit. An appropriate line of credit with a volume of EUR 2.0bn was agreed with a broad consortium of international banks in April 2022, replacing non-utilised bilateral lines of credit with a volume of around EUR 0.7bn. The Lufthansa Group’s available liquidity thus increased by around EUR 1.3bn. At the end of the reporting year, it amounted to EUR 10.4bn (previous year: EUR 9.4bn).

Further reduction of debt as the core goal of financial strategy

The long-term financial strategy continues to focus on reducing the level of gearing. The generation of strong free cash flows in particular is intended to help reduce the volume of net debt. Income from the sale of business units which are to be sold off in whole or in part for strategic reasons may also potentially contribute to a reduction in the volume of debt.

Aim is to return to investment grade rating

Before the coronavirus crisis, the rating agencies Standard & Poor’s and Moody’s both rated the Lufthansa Group as investment grade. As a result of the coronavirus crisis and its impact, both agencies downgraded their ratings. Scope Ratings continuously rated the Lufthansa Group at investment grade throughout the crisis. Fitch, which issued its first-ever credit rating for the Lufthansa Group on 1 November 2023, is the first of the three globally leading rating agencies to rate the Lufthansa Group investment grade following the COVID pandemic. This honors the successful measures taken to reduce debt and sustainably strengthen the balance sheet.

The Group aims to restore its investment grade rating with all its rating agencies. Investment grade ratings for the Company’s debt ensure good access to the capital markets and low funding costs and thus financial flexibility. Conditions for an investment grade rating continue to improve through the operating result and continued debt reduction, amongst other things.

In order to measure the Group‘s ability to service its debts the key figure Adjusted Net Debt / Adjusted EBITDA will be used. By using adjusted net debt, the ratio also includes pension provisions as well as classic net indebtedness. From 2019 onwards, when the new accounting standard for leases was introduced (IFRS 16), it also includes financial obligations from the Group’s leases (also for property and aircraft).

Adjusted Net Debt / Adjusted EBITDA

Adjusted Net Debt / Adjusted EBITDA
 2022 in €m2021 in €mChange in %
Net indebtedness1)6,6248,776–25
Net pension obligations1,9936,540–70 
Adjusted Net Debt8,61715,316–44
Adjusted EBIT1,509–1,666 
Depreciation and amortisation2,2772,2591
Adjusted EBITDA3,86593538
Adjusted Net Debt/
Adjusted EBITDA
2.3x25.8x-91

1) In order to calculate net indebtedness, here 50% of the hybrid bond issued in 2015 (EUR 247m) has been discounted. Calculation of net indebtedness Annual report p. 49.