S&P lifts Deutsche Lufthansa

S&P said it raised its ratings on Deutsche Lufthansa AG and its senior unsecured debt to BB+ from BB and its junior subordinated debt to B+ from B.

“We expect demand for Lufthansa's flights in 2023 to increase to up to 85% of pre-pandemic levels from 70% in 2022, based on revenue-passenger-kilometers (RPKs). This is at the higher end of our previous forecast of 75%-85% of 2019 levels (published in November 2022) and reflects the ongoing pick-up in air travel demand–so far largely inelastic to cost-of-living inflation and rising interest rates. According to the International Air Travel Association, in February this year, total global air passenger traffic (measured in RPKs) reached 84.9% of February 2019 levels and rose 55.5% compared with February 2022,” S&P said in a press release.

The agency said it expects the airline’s revenue to beat 2019’s €36.4 billion. Lufthansa posted 2022 revenue of €32.8 billion in 2022.

The outlook is positive.

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