Vision

Lufthansa Group overview

Key fi gures Lufthansa Group

		Jan. – Sept. 2011	Jan. – Sept. 2010	Change in %	July – Sept. 2011	July – Sept. 2010	Change in %
Revenue and result
Total revenue	€m	22,138	20,193	9.6	8,075	7,568	6.7
of which traffi c revenue	€m	18,410	16,445	11.9	6,813	6,242	9.1
Operating result	€m	578	612	– 5.6	575	783	– 26.6
EBIT	€m	564	957	– 41.1	692	893	– 22.5
EBITDA	€m	1,854	2,206	– 16.0	1,115	1,330	– 16.2
Net profi t / loss for the period	€m	288	524	– 45.0	494	628	– 21.3
Key balance sheet and cash fl ow statement fi gures
Total assets	€m	28,825	29,501	– 2.3	–	–	–
Equity ratio	%	28.0	25.1	2.9 pts	–	–	–
Net indebtedness	€m	1,623	1,521	6.7	–	–	–
Cash fl ow from operating activities	€m	2,193	2,425	– 9.6	453	1,005	– 54.9
Capital expenditure (gross)	€m	1,996	1,760	13.4	559	786	– 28.9
Key profi tability and value creation fi gures
Adjusted operating margin 1)	%	3.0	3.5	– 0.5 pts	7.6	11.1	– 3.5 pts
EBITDA margin	%	8.4	10.9	– 2.5 pts	13.8	17.6	– 3.8 pts
Lufthansa share
Share price at the quarter-end	€	9.76	13.49	– 27.7	–	–	–
Earnings per share	€	0.63	1.14	– 44.7	1.08	1.36	– 20.6
Traffi c fi gures
Passengers	thousands	80,671	74,608	8.1	30,408	28,981	4.9
Passenger load factor	%	77.7	79.6	– 1.9 pts	81.7	83.6	– 1.9 pts
Freight and mail	thousand tonnes	1,588	1,470	8.0	518	531	– 2.4
Cargo load factor	%	66.6	68.0	– 1.4 pts	66.5	66.4	0.1 pts
Available tonne-kilometres	millions	31,717	29,029	9.3	11,109	10,471	6.1
Revenue tonne-kilometres	millions	23,148	21,697	6.7	8,396	8,031	4.5
Overall load factor	%	73.0	74.7	– 1.7 pts	75.6	76.7	– 1.1 pts
Flights	number	857,450	822,021	4.3	299,624	295,087	1.5
Employees
Employees as of 30.9.	number	120,110	116,838	2.8	–	–	–

1) Performance indicator to enable comparison with other airlines: (operating result + write-backs of provisions) / revenue. Date of publication: 27 October 2011.

1 To our shareholders
39 Further information
3 Interim management report
40 Credits/Contact
28 Interim fi nancial statements
Financial calendar 2012

Ladies and gentlemen, Financial calendar 2012

The current year continues to be exceptionally eventful. The companies in the Lufthansa Group have already had to adapt quickly to new developments several times. This is not unusual in our sector and we have developed an outstanding degree of flexibility for the industry in dealing with exogenous challenges such as natural disasters, political unrest, fluctuations in demand and changing oil prices. But this year we have also had to cope with much less comprehensible burdens such as the air traffic tax or recently the provisional night-flight ban in Frankfurt that was imposed virtually overnight. They pose additional challenges for the managers and staff of our companies in what are already difficult times. Fears of a recession and concerns about the effects of the debt crises in Europe and the USA have already had a clear effect on the course of business since the third quarter. 15 March Press Conference and Analysts' Conference on 2011 results 3 May Release of Interim Report January – March 2012 8 May Annual General Meeting in Cologne 2 Aug. Release of Interim Report January – June 2012 31 Oct. Press Conference and Analysts' Conference on interim result January – September 2012

In the past nine months the Lufthansa Group has nevertheless been able to increase its revenue and generate an operating profit of EUR 578m. This result does not have us jumping for joy, but it is an accurate reflection of the various forces that influence our operating segments.

As expected, the Passenger Airline Group made it into profitability during the third quarter. The operating profit was delivered by SWISS and Lufthansa Passenger Airlines, but it was lower than last year. Lufthansa Cargo was able to report the second-highest operating

result in its company history. In the course of the third quarter Lufthansa Cargo also felt the slowdown in the global economy, however. Lufthansa Technik and Lufthansa Systems also closed the reporting period with operating profits. LSG Sky Chefs even increased its earnings again.

In view of earnings developments in the third quarter and the deteriorating booking forecasts for the airborne companies, we adjusted our earnings forecast for the financial year 2011 already in September. Since then we are assuming that we will achieve an operating profit in the upper three-digit million euro range.

Ladies and gentlemen, the developments this year more than ever confirm our conviction that the combination of far-sighted action and flexibility to adapt at short notice to the changing environment is a decisive factor for the Company's successful development and competitive position. There was ample opportunity to apply both of these strengths in recent months – be it in investment decisions, such as the modernisation of the fleet, in the ongoing improvement of cost structures or in adjustments to capacity, which have already been made several times. In our current formation and with the commitment of our managers and staff we continue to look to the future with confidence.

We thank you for your trust.

Christoph Franz Chairman of the Executive Board and CEO

Stephan Gemkow Member of the Executive Board Chief Financial Officer

Stefan Lauer Member of the Executive Board Chief Officer Group Airlines and Corporate Human Resources

Carsten Spohr Member of the Executive Board Chief Officer Lufthansa German Airlines

Lufthansa share

The fall in economic growth rates and growing risks from the debt crises in European countries and the USA resulted in sharp price corrections on stock markets around the world. The DAX plunged to a low of 5,072 and closed at 5,502 points at the end of September. This represents a loss of one fifth of its value since the beginning of the year.

Airline shares came under particular pressure in this generally weak and simultaneously volatile market environment, especially as the successively reduced economic forecasts were accompanied by a persistently high oil price. The Lufthansa share lost 35.1 per cent in the third quarter, closing the quarter at EUR 9.76. In addition to the macroeconomic uncertainty mentioned above and the general stock market losses, the share price suffered from an adjusted earnings expectation in September. These factors also led to corrections in analysts' recommendations, which were confirmed beyond the end of the month. At the end of the reporting period the average target price for Lufthansa dropped from EUR 18.50 to EUR 15.52. The higher short-term risks are nonetheless offset in the opinion of the majority of analysts by the fundamentally sound and financially solid structure of the Lufthansa Group, which remains unchanged.

Shareholder structure by nationality in % (as of 30.9.2011)

The free float for Lufthansa shares is 100 per cent. As of 30 September 2011, 67.8 per cent of Lufthansa shares were held by German investors. Institutional investors held 64.3 per cent and private individuals 35.7 per cent. Two further investors, Franklin Templeton (3.19 per cent) and AXA S.A. (3.05 per cent), exceeded the statutory disclosure threshold of 3 per cent in September. The largest single shareholder is still BlackRock Inc. with 5.08 per cent.

Information on analysts' recommendations and the shareholder structure is updated regularly. The latest information is available on our website i www.lufthansa.com/investor-relations.

Performance of the Lufthansa share, indexed as of 31.12.2010, compared with the DAX and competitors

Interim management report

Economic environment and sector performance

GDP growth 2011 compared with previous year

in %	Q11)	Q21)	Q32)		Q42) Full year 2)
World	3.5	2.9	2.9	2.8	3.0
Europe	2.7	2.0	1.6	1.3	1.9
Germany	4.6	2.8	2.5	2.2	3.0
North America	2.3	1.7	1.6	1.3	1.7
South America	4.8	3.9	3.8	3.6	4.0
Asia/Pacific	4.9	4.5	4.5	4.7	4.6
China	9.7	9.5	9.2	8.9	9.3
Middle East	5.4	5.3	5.4	5.4	5.4
Africa	1.7	1.2	1.2	1.7	1.6

Source: Global Insight World Overview as of 15.10.2011. 1) Partially forecast.

Macroeconomic situation Global economic growth has slowed over the course of 2011. After increasing by 3.5 per cent in the first quarter, the world economy expanded by just 2.9 per cent in the second and third quarters. In addition to the effects of the disasters in Japan and the continued weak performance of global trade, this trend is also being driven by the worsening government debt situation in the euro area and the USA, considerable uncertainty on financial markets and dwindling consumer and business confidence.

In the USA the pace of economic recovery has slowed further. By contrast, growth in the Asia-Pacific region was only slightly down. This is principally due to the relatively stable performance in China, where strong domestic demand partly made up for less dynamic external trade. In India too, the economy continued to expand strongly, largely as a result of brisk internal demand. In the euro area a strong growth spurt in the first quarter was followed by a sharp slowdown in the months thereafter. Weaker domestic demand was responsible, as was a fall in the export growth rate as the global economy cooled down. After a very strong start, the economy slowed noticeably in Germany over the course of the year as well, mainly due to a decline in external trade and a fall in consumer spending.

After a rise in the third quarter the US dollar had returned to its year-opening level by the end of September. On average for the reporting period it was nevertheless 7 per cent down on last year. The Swiss franc appreciated by 30 per cent over the course of the year until the Swiss central bank fixed the exchange rate at EUR 1.20, pushing the franc back down by 8 per cent. On average it was 12 per cent stronger than in the same period last year. The pound sterling and Chinese renminbi were virtually unchanged against the euro as of the reporting date, although they both lost 2 per cent on average. The Japanese yen has appreciated continually over the last nine months and was up around 6 per cent against the euro. The exchange rate movements had a mixed effect on the individual companies and their impact on the items of the income statement was in some cases very substantial. Lufthansa already has a strong natural hedge, however, because the Group has a very balanced overall currency exposure. To limit the risks from the remaining net exposure Lufthansa practises systematic risk management. In total exchange rates had a slightly positive effect of EUR 66m on the operating result in the first nine months of 2011.

Development of crude oil, kerosene and currency

		Minimum	Maximum	Average	30.9. 2011
ICE Brent	in USD/bbl	93.33	126.65	111.47	102.76
Kerosene	in USD/t	840.50	1,133.00	1,010.79	908.25
USD	1 EUR/USD	1.2907	1.483	1.4065	1.3387
JPY	1 EUR/ JPY	102.64	122.76	113.11	103.12
GBP	1 EUR/GBP	0.8302	0.9039	0.8713	0.8590
CHF	1 EUR/CHF	1.0300	1.3186	1.2306	1.2157

Since July 2011 oil prices have fallen back slightly in line with increasing economic risks. They are nevertheless still at a high level. On 30 September 2011 a barrel of Brent Crude cost USD 102.76. The average price for the first nine months was EUR 111.47/barrel, 43 per cent up on the same period last year. The jet crack, the price difference between crude oil and kerosene, and therefore the price for kerosene itself showed a similar trend. The average kerosene price was USD 1,010.79/tonne, representing an increase of some 45 per cent compared with the same period last year. The fuel price is a central factor behind changes in the Lufthansa Group's cost base. Lufthansa also applies systematic risk management to limit the risks that this causes. In the reporting period this price hedging lifted earnings by EUR 616m. Detailed information on the rule-based hedging policy can be found in our Annual Report 2010, from p. 140 and p. 200 .

²⁾ Forecast.

Sector developments Passenger traffic continued to rise worldwide in the first eight months of the current year, but for months the growth rate has been slowing. Whereas revenue passengerkilometres increased by a total of 6.1 per cent compared with the same period in 2010, the month of August saw sales growth of just 4.5 per cent. From a geographical perspective the picture is also varied. Sales growth for the European carriers was very robust, rising by 9.7 per cent. In this period the North American airlines expanded by just 3.2 per cent and the airlines from the Asia-Pacific region by 4.5 per cent. The front-runners are still Latin American carriers with growth of 13.2 per cent up to August 2011.

In the premium business, too, less dynamic growth can be observed. According to IATA information, premium traffic went up year on year by 7.5 per cent in the first eight months. For the month of August, however, the increase came to just 2.3 per cent.

The structure of international passenger traffic is still determined by a pattern of growing and more closely coordinated alliances. In summer 2011 the joint venture between Lufthansa and ANA was approved by the Japanese competition authorities. The takeoff of the cooperation is planned for April 2012, with joint flights available for booking from February 2012. American Airlines and Japan Airlines, both members of the oneworld alliance, started their transpacific joint venture in April 2011. The airline alliance Skyteam welcomed the new members China Eastern Airlines and China Airlines this summer.

Sales in global freight transport saw a sharp fall of 3.8 per cent in August. Overall, for the first eight months they were only 0.2 per cent up on last year's strong figure. This is a result of the slowdown in global economic growth. Only the airlines in Europe, Latin America and the Middle East were able to report sales increases in this period. Here too, growth rates were in decline, however. In August the European freight carriers' recognised sales were down by 1.8 per cent on last year.

Course of business

Overview The Lufthansa Group can look back on an eventful nine months. Whereas the first half-year was generally positive, despite the adverse impact of events in Japan, North Africa and the Middle East, the macroeconomic prospects darkened over the course of the third quarter, which in turn increasingly depressed the Company's course of business. At the same time the oil price remained comparatively high. Over the course of the third quarter the Group registered considerable fluctuations in earnings. Altogether the Lufthansa Group was able to increase revenue in the reporting period January to September, but the operating result remained slightly below last year's.

In the Passenger Airline Group business segment the performance of the individual airlines was again very mixed. Overall, the operating result weakened significantly. As expected, the Logistics segment was below last year's record earnings but still reported the second-best result in its history. The result in the MRO segment was still depressed by provisions and was therefore down on last year. The IT Services business segment generated an operating profit at the same level as last year, making good the shortfall from the first half-year. The Catering segment performed very well and increased its operating profit compared with last year.

Thanks to their high degree of flexibility, the companies in the Lufthansa Group can adapt quickly to changes in the operating environment. Over the course of this year they reacted to increasing sales and earnings risks by taking measures to safeguard earnings and by intensifying initiatives already underway. Depending on the company and the requirements of the situation, these range from further capacity adjustments to renewed focus on company strategy.

Economic environment and sector performance Course of business Earnings position To our shareholders Interim management report | Interim financial statements | Further information

Significant events At the end of September the Supervisory Board of Deutsche Lufthansa AG approved the purchase of a total of twelve new aircraft for the Group. Of these aircraft, two Airbus A380s and one Airbus A330-300 are to be used on Lufthansa Passenger Airlines long-haul routes from 2014. The order also includes four Airbus A320s and five Embraer 195s for Lufthansa Passenger Airlines, to be delivered successively starting in 2012.

Staff and management As of 30 September 2011 the Lufthansa Group had a total of 120,110 employees, around 2.8 per cent more than in the previous year.

At the end of June a new wage settlement was reached with the pilots' union Vereinigung Cockpit for some 4,500 pilots at Lufthansa Passenger Airlines, Lufthansa Cargo and Germanwings. The agreement provides for a wage increase of 3.5 per cent, backdated to 1 April 2011. This corresponds to an increase of 3.2 per cent for the full year. The new wage settlement runs until 30 April 2012.

Changes in the group of consolidated companies and in

reporting standards There were no significant changes to the group of consolidated companies compared with the same period last year. The individual changes compared with year-end 2010 and 30 September 2010 are shown in the table on p. 34–35 . These changes had no significant effect on the consolidated balance sheet and income statement in comparison with the same period last year.

The standards and interpretations mandatory for the first time as of 1 January 2011 also did not have a significant effect on the Group's net assets, financial and earnings position. For further details, see the notes to the consolidated financial statements on p. 34 .

Earnings position

Traffic figures of the Lufthansa Group's airlines

		Jan. – Sept. 2011	Jan. – Sept. 2010	Change in %
Passengers carried	thousands	80,671	74,608	8.1
Available seat-kilometres	millions	202,783	183,311	10.6
Revenue seat-kilometres	millions	157,567	145,983	7.9
Passenger load factor	%	77.7	79.6	–1.9 pts
Freight/mail	thousand tonnes	1,588	1,470	8.0
Available cargo tonne-kilometres	millions	10,269	9,142	12.3
Revenue cargo tonne-kilometres	millions	7,120	6,504	9.5
Cargo load factor	%	66.6	68.0	–1.4 pts
Total available tonne-kilometres	millions	31,717	29,029	9.3
Total revenue tonne-kilometres	millions	23,148	21,697	6.7
Overall load factor	%	73.0	74.7	–1.7 pts
Flights	number	857,450	822,021	4.3

Revenue and income Traffic figures for the Lufthansa Group went up considerably compared with the same period last year (see table above). The Group's airlines transported about 80.7 million passengers (+8.1 per cent) and 1.6 million tonnes of freight and mail (+8.0 per cent). The individual performance data for the separate segments is presented in the respective chapters.

The increased traffic led to growth of 11.9 per cent in traffic revenue to EUR 18.4bn in the first nine months of the financial year. Volumes accounted for 7.7 per cent of the additional income and higher prices (including fuel surcharges and air traffic tax) for 5.7 per cent. Exchange rate effects reduced revenue by 1.5 per cent.

Revenue and income

	Jan. – Sept. 2011 in €m	Jan. – Sept. 2010 in €m	Change in in %
Traffic revenue	18,410	16,445	11.9
Other revenue	3,728	3,748	–0.5
Total revenue	22,138	20,193	9.6
Changes in inventories and work performed by the entity and capitalised	53	120	–55.8
Other operating income	1,740	2,032	–14.4
Total operating income	23,931	22,345	7.1

External revenue share of the business segments in % (as of 30.9.2011)

Revenue development in €m (Jan.– Sept.)

The Passenger Airlines Group accounted for EUR 16.0bn (+12.4 per cent) of traffic revenue and the Logistics segment for EUR 2.1bn (+11.3 per cent).

At EUR 3.7bn, other revenue nearly matched last year's figure (– 0.5 per cent). Of this total, the MRO segment contributed revenue of EUR 1.7bn (–2.9 per cent), IT Services EUR 168m (–4.0 per cent) and Catering EUR 1.3bn (+0.9 per cent). The airborne companies in the Passenger Airline Group and Logistics segments contributed EUR 548m (+5.2 per cent) to other revenue.

Group revenue therefore climbed year on year by 9.6 per cent to EUR 22.1bn. The above graph shows revenue for the last five years. The Passenger Airline Group's share of total revenue climbed to 75.7 per cent (+1.6 percentage points). The distribution of revenue by segment and region is shown in the segment reporting on p. 37 .

Other operating income fell by 14.4 per cent to EUR 1.7bn. This decrease was largely due to lower income from disposals of noncurrent assets (EUR –162m). Last year, this figure included profits from the transfer of shares in Fraport to the Lufthansa Pension Trust (EUR 94m) and book gains from the sale of 6.2 million shares in Amadeus IT Holding S.A. (EUR 67m). Exchange rate gains also fell year on year by EUR 140m. These are offset by a corresponding fall in exchange rate losses recognised in other operating expenses. Income from write-ups on non-current assets declined by EUR 29m, in particular due to the movement of the US dollar. Other income included refunds received for air traffic control charges paid in prior years. Other items did not vary significantly compared with the previous year.

Total operating income therefore went up by EUR 1.6bn or 7.1 per cent to EUR 23.9bn.

Expenses Operating expenses rose by a total of EUR 1.8bn (+ 8.4 per cent) to EUR 23.3bn. This was driven largely by the 12.8 per cent increase in the cost of materials and services. As in the first half-year, the increase stemmed above all from the EUR 913m (+23.7 per cent) leap in fuel costs to EUR 4.8bn. In addition to the 23.9 per cent increase in fuel prices (after hedging), volumes also contributed 7.8 per cent to expenses. By contrast, the US dollar's performance reduced costs by 8.0 per cent. Fuel costs included a positive result from price hedging of EUR 616m. Other raw materials, consumables and supplies were up by 3.1 per cent at EUR 2.0bn.

Fees and charges rose by 15.7 per cent to EUR 4.0bn, principally due to increased traffic. Key factors here were increases in air traffic control charges (+9.5 per cent), take-off and landing fees (+9.8 per cent) and passenger fees (+15.1 per cent). The air traffic tax introduced at the beginning of the year accounted for expenses of EUR 265m. Other purchased services were 1.9 per cent below the figure for last year at EUR 2.2bn, partly due to lower charter expenses and lower expenses for external MRO services.

Expenses

	Jan. – Sept. 2011 in €m	Jan. – Sept. 2010 in €m	Change in %
Cost of materials and services	12,912	11,445	12.8
of which fuel	4,772	3,859	23.7
of which fees and charges	3,953	3,416	15.7
of which operating lease	148	194	–23.7
Staff costs	5,072	4,820	5.2
Depreciation	1,263	1,240	1.9
Other operating expenses	4,035	3,971	1.6
Total operating expenses	23,282	21,476	8.4

Staff costs rose by 5.2 per cent in conjunction with a 1.4 per cent increase in the average number of employees to 118,709. The increase stems primarily from higher additions to pension provisions, cost increases due to exchange rate movements and the new wage settlements. The reason for the higher pension expenses was again the lower discount rate, along with an additional funding obligation towards pension funds.

Depreciation and amortisation of EUR 1.3bn was slightly above last year's (+1.9 per cent). EUR 64m (+ 6.6 per cent) of this increase comes from depreciation of aircraft, largely for new aircraft purchases last year and this year. Impairment losses came to EUR 6m in total (previous year: EUR 44m), of which EUR 4m were for two Boeing 737-500s held for sale.

Other operating expenses include additional impairment of EUR 8m relating in particular to five Boeing B737-500s, two Airbus A330-200s and four Bombardier CRJ 200s held for sale. All in all, other operating expenses rose modestly to EUR 4.0bn (+1.6 per cent). The expenses were increased above all by higher staff-related costs (EUR +62m), higher legal, audit and advisory fees (EUR +28m), and higher expenses for advertising and sales promotion (EUR +18m), computerised distribution systems (EUR +14m) and credit card commissions (EUR +13m). Furthermore, lower market values of current securities resulted in write-offs of EUR 21m. These additional expenses were offset by lower exchange rate losses (EUR –111m). The exchange rate losses are offset by corresponding exchange rate gains in other operating income, which were also reduced. The individual other items did not vary significantly compared with last year.

Earnings development Whereas a clear improvement in earnings was registered in the first half of 2011, earnings performance in the third quarter was well down on the same period last year, which was strong. As a result, the profit from operating activities declined in the reporting period to EUR 649m (previous year: EUR 869m).

The operating result, which is regularly adjusted for the items shown in the table on p. 8 , was down EUR 34m on last year's figure at EUR 578m. The adjusted operating margin declined by 0.5 percentage points to 3.0 per cent. This is calculated as operating result plus write-backs of provisions divided by revenue.

The result from equity investments sank in the reporting period by EUR 9m to EUR 62m. The decline is due to the result of the valuation of equity investments accounted for using the equity method, which fell to EUR –3m and largely consists of the equity investments in SN Airholding, Sun Express and Jade Cargo. Net interest improved by EUR 36m to EUR –214m, thanks mainly to lower interest expense on pension provisions.

The result from other financial items slumped by EUR 164m to EUR –147m. Changes in the fair values of options used for hedging (primarily fuel hedges) amounting to EUR –116m (previous year: EUR +5m) were recognised in the financial result in line with IAS 39. However, expenses arising from changes in the fair value of options must be seen in connection with the hedging gains and losses realised and changes to the intrinsic value of hedging transactions, which are recognised directly in equity. As a result, the positive result of hedging considerably alleviated fuel costs by EUR 616m in the first three quarters. After deduction of derivatives that had fallen due, the intrinsic value of the outstanding fuel price hedges recognised in equity sank by just EUR 151m. In addition, expenses of EUR 12m stemmed from negative changes in the value of hedging instruments considered under the definition of IAS 39 as held for trading. Last year, the valuation of these financial derivatives generated income of EUR 15m.

Earnings before interest and taxes (EBIT) reflect developments in the operating result, the result from equity investments and other financial items. The figure fell to EUR 564m (previous year: EUR 957m).

Operating result and net profit/loss for the period in €m (Jan.– Sept.)

As of the end of the third quarter, earnings before taxes (EBT) came to EUR 350m (previous year: EUR 707m). Income taxes of EUR 51m were paid on these earnings. The net profit for the period after minority interests (EUR 11m) came to EUR 288m, and was EUR 236m below last year's figure of EUR 524m. Earnings per share were therefore EUR 0.63 (previous year: EUR 1.14). Adjusted for the effect on earnings of the above-mentioned changes in the fair value of options, earnings per share would have amounted to EUR 0.82 (previous year adjusted: EUR 1.14).

Reconciliation of results

		Jan. – Sept. 2011	Jan. – Sept. 2010
in €m	Income statement	Reconciliation with operating result	Income statement	Reconciliation with operating result
Total revenue	22,138		20,193
Changes in inventories	53		120
Other operating income	1,740		2,032
of which book gains and current financial investments		–60		–238
of which income from reversal of provisions		–89		–99
of which write-ups on capital assets		–4		–33
of which period-end valuation of non-current financial liabilities		–29		–54
Total operating income	23,931	–182	22,345	–424
Cost of materials and services	–12,912		–11,445
Staff costs	–5,072		–4,820
of which past service cost		19		–3
Depreciation, amortisation and impairment	–1,263		–1,240
of which impairment losses		6		44
Other operating expenses	–4,035		–3,971
of which impairment losses on assets held for sale – non-operating		8		0*
of which expenses incurred from book losses and current financial investments		57		28
of which period-end valuation of non-current financial liabilities		21		98
Total operating expenses	–23,282	111	–21,476	167
Profit / loss from operating activities	649		869
Total from reconciliation with operating result		–71		–257
Operating result		578		612
Result from equity investments	62		71
Other financial items	–147		17
EBIT	564		957
Write-downs (included in profit from operating activities)	1,263		1,240
Write-downs on financial investments, securities and assets held for sale	27		9
EBITDA	1,854		2,206

* Rounded below EUR 1m.

To our shareholders Interim management report | Interim financial statements | Further information Earnings position

Cash flow and capital expenditure

In the first nine months of the 2011 financial year the Lufthansa Group generated cash flow from operating activities of EUR 2.2bn (previous year: EUR 2.4bn). Based on a EUR 357m drop in the profit before income taxes, non-cash expenses of EUR 128m from changes in the market value of financial derivatives (previous year: income of EUR 26m) were eliminated when calculating cash flow because they do not affect the cash flow from operating activities. After adjustment for non-cash depreciation and amortisation as well as for the proceeds of non-current asset disposals, which are attributed to investing activities, cash flow improved by EUR 204m. Income tax payments represented a burden of EUR 185m. The change in working capital was at the same level as last year.

In the first nine months of 2011 the Lufthansa Group recorded gross capital expenditure of EUR 2.0bn. EUR 1.7bn of the total went on 35 aircraft (four Airbus A380s, two A330s, nine A321s, two A320s, two A319s, two Boeing 737s, two B767s, seven Bombardier CRJ 900s, four Embraer 195s and one ATR 700) as well as on aircraft overhauls and down payments. A further EUR 168m was invested in other items of property, plant and equipment. Intangible assets accounted for EUR 56m of the remaining capital expenditure. Financial investments of EUR 101m related mainly to loans.

Disposals of repairable spare parts for aircraft generated inflows of EUR 22m. The funding requirement was partly covered by interest and dividend income (EUR 375m in total) and proceeds of EUR 344m from the disposal of assets – in particular aircraft and non-current securities. Cash proceeds of EUR 717m were generated by the acquisition and disposal of current securities and funds. Net cash totalling EUR 536m was therefore used for the Group's investing and cash management activities (previous year: EUR 2.1bn).

Despite the extensive investment programme, the target of generating free cash flow was reached yet again. This is defined as cash flow from operating activities less net capital expenditure and amounted to EUR 940m (previous year: EUR 1.3bn).

The balance for financing activities was a net cash outflow of EUR 1.7bn. A minor amount of new fundraising (EUR 145m) was outweighed by dividend payments (EUR 293m), regular debt repayments (EUR 774m) and interest payments of EUR 407m. Moreover, the good liquidity position was used to optimise the financial structure in the first half-year and five borrower's note loan tranches in total worth EUR 407m were paid back early.

Cash and cash equivalents declined by EUR 76m to EUR 1.0bn. This includes a reduction of EUR 3m due to exchange rate movements.

The internal financing ratio was 109.9 per cent (previous year: 137.8 per cent). Overall, cash including securities at the end of the third quarter sank to EUR 4.4bn (previous year: EUR 5.7bn). The detailed cash flow statement can be found on p. 33 .

Assets and financial position

The consolidated balance sheet total fell compared with year-end 2010 by EUR 495m to EUR 28.8bn. Non-current assets rose slightly by EUR 9m, while current assets sank by EUR 504m.

Within non-current assets, the item aircraft and reserve engines increased by EUR 622m to EUR 11.8bn due to additions in the current financial year.

The decline of EUR 231m in other equity investments is largely due to the changes in the market value of the shares in Amadeus IT Holding S.A. (EUR –128m) and in JetBlue (EUR –91m), which are not recognised in profit and loss. Derivative financial instruments fell by a total of EUR 115m, principally due to currency and fuel hedges, offset by an increase in interest rate hedges.

Non-current securities sank by EUR 110m due in large part to the disposal of a borrower's note loan.

Within current assets, receivables went up by EUR 738m, largely for seasonal and billing reasons. The decline in current financial derivatives (EUR –137m) relates principally to fuel hedges, which was offset by an increase in the market value of currency hedges. Cash and cash equivalents – consisting of current securities, bank balances and cash-in-hand – went down by a total of EUR 1.0bn to EUR 4.4bn. Non-current assets rose from 64.7 per cent of total assets at year-end 2010 to 65.8 per cent.

Shareholders' equity (including minority interests) came to EUR 8.1bn as of the reporting date and was therefore down by EUR 276m (–3.3 per cent). Starting from a positive post-tax result of EUR 299m, this decline is largely due to dividend payments of EUR 293m to shareholders of Deutsche Lufthansa AG and minority interests and to negative changes in the market values of financial assets amounting to EUR 307m. Of these, EUR 73m resulted from lower intrinsic values of financial derivatives used to hedge fuel price, exchange rate and interest rate risks. Positive currency translation differences increased equity by EUR 29m. This brought the equity ratio to 28.0 per cent and therefore almost back to the level of year-end 2010 (28.4 per cent).

Calculation of net indebtedness and gearing

	30 Sept. 2011	31 Dec. 2010	Change as of 31 Dec. 2010
	in €m	in €m	in %
Liabilities to banks	1,070	1,925	–44.4
Bonds	2,122	2,177	–2.5
Other non-current borrowing	2,861	3,082	–7.2
	6,053	7,184	–15.7
Other bank borrowing	30	23	30.4
Group indebtedness	6,083	7,207	–15.6
Cash and cash equivalents	1,021	1,097	–6.9
Securities	3,329	4,283	–22.3
Non-current securities
(liquidity reserve)*	110	231	–52.4
Net indebtedness	1,623	1,596	1.7
Pension provisions	2,544	2,571	–1.1
Net indebtedness and pensions	4,167	4,167	0.0

Gearing in %	51.7	50.0	1.7 pts

* Realisable at any time.

Non-current liabilities and provisions went down by EUR 992m to EUR 10.2bn, while current borrowing climbed by EUR 773m to EUR 10.6bn. Within non-current borrowing, financial liabilities sank by EUR 897m as a result of the early repayment of the borrower's note loans and other maturities. The funding of pension obligations via external pension funds reduced the corresponding provisions by EUR 27m to EUR 2.5bn.

Within current liabilities, financial borrowing went down by EUR 234m. This increase was due to maturities and was offset in the reporting period by capital repayments. In addition, trade payables and other financial liabilities climbed sharply (EUR +627m) for seasonal and billing reasons, as did liabilities from unused flight documents (EUR +540m).

Net indebtedness (including non-current liquidity reserves of EUR 110m) came to EUR 1.6bn at the end of the third quarter 2011, almost unchanged from year-end 2010. Gearing including pension provisions also hardly changed and at 51.7 per cent (year-end 2010: 50.0 per cent) was still in the middle of the target range of 40 to 60 per cent.

Group fleet – Number of commercial aircraft

Deutsche Lufthansa AG (LH), SWISS (LX), Austrian Airlines (OS), British Midland (bmi), Germanwings (4U), Lufthansa CityLine (CLH), Air Dolomiti (EN), Eurowings (EW) and Lufthansa Cargo (LCAG) as of 30.9.2011

Manufacturer/type	LH	LX	OS	bmi	4U	CLH	EN	EW	LCAG	Group fleet	of which finance lease	of which operating lease	Change as of 31.12.10	Change as of 30.9.10
Airbus A300	0									0			–	–1
Airbus A310	23)									2			–	–1
Airbus A319	32	7	7	11	30					87	4	21	+2	+4
Airbus A320	46	25	9	7						87	11	6	+3	+3
Airbus A321	53	7	6	7						73	5	5	+9	+11
Airbus A330	15	17		2						34		6	–	+1
Airbus A340	50	13	22)							65	2	2	–1	–2
Airbus A380	8									8			+4	+5
Boeing 737	59		11	14						84	3	11	–4	–4
Boeing 747	30									30			–	–
Boeing 767			6							6	2		–	–
Boeing 777			4							4			–	–
Boeing MD-11F									18	18			–	–
Bombardier CRJ	311)		2			33		8		74		8	–3	–6
Bombardier C-Series										0			–	–
Bombardier Q-Series			14							14			–5	–6
ATR	51)						6			11		7	–5	–8
Avro RJ		20				13				33		14	–3	–4
BAe 146										0			–	–1
Embraer	281)	43)	33)	19						54	3	9	+5	+5
Fokker F70			9							9	1		–	–
Fokker F100			15							15			–	–
Cessna Citation	0									0			–4	–4
Total aircraft	359	93	88	60	30	46	6	8	18	708	31	89	–2	–8

1) Let to Lufthansa regional airlines.

3) Leased to company outside the Group.

2) Let to SWISS.

Passenger Airline Group business segment

Key figures Passenger Airline Group of which Lufthansa

					Passenger Airlines 3)
		Jan. – Sept. 2011	Jan. – Sept. 2010	Change in %	July – Sept. 2011	July – Sept. 2010	Change in %	Jan.– Sept. 2011	Jan.– Sept. 2010	Change in %
Revenue	€m	17,314	15,460	12.0	6,463	5,893	9.7	11,703	10,248	14.2
of which with companies of the Lufthansa Group	€m	557	490	13.7	184	189	–2.6
Operating result	€m	169	218	–22.5	408	560	–27.1	161	158	1.9
Segment result	€m	212	305	–30.5	460	613	–25.0
EBITDA1)	€m	1,263	1,283	–1.6	693	1,108	–37.5	872	795	9.7
Segment capital expenditure	€m	1,701	1,612	5.5	451	721	–37.4
Employees as of 30.9.	number	59,123	56,965	3.8	59,123	56,965	3.8	39,285	37,298	5.3
Passengers 2)	thousands	80,671	74,608	8.1	30,408	28,981	4.9	49,434	44,111	12.1
Available seat-kilometres 2)	millions	202,783	183,311	10.6	73,674	67,917	8.5	137,524	121,688	13.0
Revenue seat-kilometres 2)	millions	157,567	145,983	7.9	60,216	56,764	6.1	107,004	97,262	10.0
Passenger load factor 2)	%	77.7	79.6	–1.9	81.7	83.6	–1.9 pts	77.8	79.9	–2.1 pts

1) Before profit/loss transfer from other companies.

2) Lufthansa Passenger Airlines, SWISS, bmi, Austrian Airlines and Germanwings.

3) Including regional partners.

Course of business The earnings position of the Passenger Airline Group deteriorated over the course of the third quarter. The segment was not able to match last year's operating result. The difficulties experienced since the start of the year as a result of the crises in Japan, North Africa and the Middle East were accompanied by growing fears of a global recession. At the same time, the persistently high oil price and the air traffic tax introduced in Germany and Austria also inflated the cost base. In the third quarter these developments led to particularly wide fluctuations in results, while new bookings declined considerably at the same time.

Segment structure The segment consists of Lufthansa Passenger Airlines, SWISS, Austrian Airlines, bmi and Germanwings, as well as the equity investments in Brussels Airlines, JetBlue and SunExpress. Extensive cooperation within this group generates synergies and competitive advantages.

Operating performance In the first nine months of the year the companies in the Passenger Airline Group increased passenger numbers by a total of 8.1 per cent to 80.7 million. Capacity soared by 10.6 per cent and was largely sold, propelled mainly by the fleet rollover and the introduction of the new Europa cabin at Lufthansa Passenger Airlines. Revenue seat kilometres were up by 7.9 per cent, whereas the passenger load factor shed 1.9 percentage points to 77.7 per cent. At the same time, the segment generated 4.2 per cent higher average yields (including fuel surcharge and air traffic tax). Traffic revenue rose overall by 12.4 per cent.

Sales increased in all traffic regions, with average yields at least staying stable.

In Europe the additional capacity was almost sold in full. Average yields climbed by 4.0 per cent and traffic revenue by 13.5 per cent year on year.

Sales in America went up by 8.2 per cent compared with last year. This trend was accompanied by an improvement of 5.5 per cent in average yields. Traffic revenue went up by 14.2 per cent.

The Asia/Pacific traffic region was still debilitated by the events in Japan in the first half of 2011. Despite this, the segment achieved sales growth of 7.7 per cent in total. Here too, average yields (+3.9 per cent) and traffic revenue (+11.8 per cent) both improved.

The sales increase in Middle East/Africa was comparatively modest at 3.5 per cent, as traffic figures were still hampered by the crises in the region. Average yields were held at the same level as last year.

The table below shows the detailed performance figures for all traffic regions.

Revenue and earnings development Increased traffic meant that the segment's traffic revenue climbed year on year to EUR 16.0bn (+12.4 per cent). In addition to the 7.9 per cent increase in sales volumes, higher prices (+5.9 per cent) also lifted revenue. Negative exchange rate movements accounted for a reduction of 1.4 per cent, however. In total, revenue grew to EUR 17.3bn (+12.0 per cent).

Other operating income fell by 4.6 per cent to EUR 867m. Lower exchange rate gains (EUR –103m) were offset by, among other things, income from the refunds for air traffic control charges paid in prior years.

Total operating income went up by 11.1 per cent to EUR 18.2bn.

Operating expenses rose year on year by 11.5 per cent to EUR 18.0bn. This increase stemmed largely from the 22.2 per cent rise in fuel expenses to EUR 4.4bn. This drove the cost of materials and services up sharply to EUR 11.3bn (+14.3 per cent).

Fees and charges also rose, due mainly to increased traffic and the new air traffic tax (EUR 265m). They were up by a total of 15.8 per cent at EUR 3.8bn. Alongside higher air traffic control charges (+9.4 per cent), the increases in passenger fees (+15.1 per cent) and in take-off and landing fees (+10.0 per cent) were particularly noteworthy.

While the average annual workforce expanded by 2.3 per cent, staff costs rose by 7.3 per cent. Higher additions to pension provisions, cost increases due to exchange rate movements and the new wage settlements were all responsible.

Depreciation and amortisation was up by 9.5 per cent to a total of EUR 1.0bn mainly due to new aircraft deliveries this year and last.

	Net traffic revenue in €m external revenue		Number of passengers in thousands		Available seat-kilometres in millions		Revenue seat-kilometres in millions		Passenger load factor in %
	Jan. – Sept. 2011	Change in %	Jan. – Sept. 2011	Change in %	Jan.– Sept. 2011	Change in %	Jan.– Sept. 2011	Change in %	Jan. – Sept. 2011	Change in pts
Europe	7,469	13.5	64,173	8.6	72,078	10.0	51,804	9.2	71.9	–0.5
America	3,862	14.2	6,831	7.8	60,076	10.2	50,494	8.2	84.1	–1.5
Asia/Pacific	3,000	11.8	4,701	8.7	44,721	12.9	36,371	7.7	81.3	–4.0
Middle East/Africa	1,473	3.5	3,916	–0.7	22,366	8.2	16,218	3.5	72.5	–3.3
Total scheduled services	15,804	12.3	79,620	8.1	199,240	10.5	154,887	7.9	77.7	–1.9
Charter	152	23.2	1,051	12.0	3,544	18.3	2,681	10.8	75.6	–5.2
Total	15,956	12.4	80,671	8.1	202,783	10.6	157,567	7.9	77.7	–1.9

Trends in traffic regions Passenger Airline Group

Other operating expenses picked up by 6.1 per cent to EUR 2.6bn. Higher costs for exchange rate losses, indirect staff costs and credit card commissions were offset by lower agency commissions.

The Passenger Airline Group reported an operating profit of EUR 169m. This was 22.5 per cent below the figure for last year (EUR 218m). The reason for the drop in the operating result is above all the reduction in earnings at British Midland. Whereas Lufthansa Passenger Airlines generated a slightly higher profit than last year, SWISS saw a substantial earnings improvement. Comments on the earnings contributions from the individual airlines can be found on the following pages.

Other segment income came in at EUR 103m (previous year: EUR 135m) and was attributable above all to book gains on the disposal of non-current assets (EUR 35m) and income from the write-back of provisions (EUR 65m).

Other segment expenses came to EUR 39m (previous year: EUR 31m). Past service costs in connection with additional funding obligations towards pension funds accounted for EUR 19m of this. Of total impairment losses of EUR 14m, EUR 12m related to seven Boeing B737-500s, two Airbus A330-200s and four Bombardier CRJ 200s, which have been decommissioned or are held for disposal. The result of the equity valuation of EUR –21m (previous year: EUR –17m) relates particularly to SN Airholding and SunExpress. The segment result fell overall by EUR 93m to EUR 212m.

Segment capital expenditure of EUR 1.7bn was slightly higher than last year's (+5.5 per cent) and was mainly incurred for new aeroplanes. In the course of the ongoing flight modernisation, deliveries of four Airbus A380s, two A330s, nine A321s, two A320s, two A319s, two Boeing 737s, two B767s, seven Bombardier CRJ 900s, four Embraer 195s and one ATR 700 were made in the first nine months.

Forecast The macroeconomic environment darkened significantly over the course of the third quarter and with it sales and bookings for the companies in the Passenger Airline Group. The regions in crisis also continued to weigh on the business. Although a gradual recovery is visible in Japan, that is not the case for the regions in North Africa and the Middle East troubled by unrest. This has a varied impact on the airlines in the segment. Furthermore, the persistently high oil price has a significant adverse effect on the airlines' profitability, in particular because the benefits of hedging are increasingly eclipsed at current price levels.

The companies in the Passenger Airline Group have prepared themselves for weak sales and higher cost pressure for the remainder of the year by taking appropriate actions. Depending on the company, this ranges from adjustments to capacity right through to extensive measures to refocus the direction of corporate strategy. Lufthansa Passenger Airlines has decided on further capacity cuts and is pursuing its Climb 2011 programme unchanged. At the same time, the restructuring efforts at Austrian Airlines and bmi were intensified once again. Planned capacity growth for the coming year has been reduced by the adjustment measures recently adopted from 9 per cent originally to 3 per cent.

For the full year 2011 it is still assumed that revenue growth will be achieved for the Passenger Airline Group. The expectation is nevertheless that the operating result will be lower than last year's.

Lufthansa Passenger Airlines

After a stable first half-year altogether, the course of business at Lufthansa Passenger Airlines was also impaired in the third quarter by the faltering overall economy, accompanied by high oil prices. This was offset by savings from the measures taken to cut unit costs as part of the Climb 2011 programme to safeguard earnings, which include the fitting of new seats in the Europa cabin and the fleet rollover.

In the first nine months of 2011 Lufthansa Passenger Airlines carried a total of 49.4 million passengers. This represents a year-on-year increase of 12.1 per cent, coupled with a simultaneous expansion of 13.0 per cent in capacity. Sales went up by 10.0 per cent. This resulted in a passenger load factor of 77.8 per cent, 2.1 percentage points down on last year. Average yields (including fuel surcharge and air traffic tax) rose by 4.2 per cent at the same time. Compared with last year this took traffic revenue up by 14.6 per cent to EUR 10.8bn. Lufthansa Passenger Airlines increased revenue overall by 14.2 per cent to EUR 11.7bn.

Operating expenses went up by EUR 1.3bn. They were driven by higher costs for fuel (EUR +567m) and higher fees and charges (EUR +418m).

The operating result for Lufthansa Passenger Airlines improved slightly in the reporting period to EUR 161m (previous year: EUR 158m). In the third quarter the result (EUR 261m) was nevertheless EUR 100m down on last year's strong figure.

In response to the deteriorating economic conditions, Lufthansa Passenger Airlines is continuously adjusting the planned capacities for future flight plans. The capacity growth in the winter flight plan 2011/12 has now been reduced from 12 per cent originally to 4 per cent by delaying the introduction of new routes and scaling back frequencies as well as other activities. In this vein, flight operations of the Lufthansa Italia brand are also to cease at the end of the summer flight timetable 2011.

In October further measures were adopted for the year ahead, which are planned to take effect no later than the start of the summer flight plan 2012. They include the decommissioning of 38 older aircraft so that the deliveries in the coming year will be implemented in a full rollover and the fleet will be reduced by six aircraft. Altogether, Lufthansa Passenger Airlines has cut its planned capacity expansion for 2012 to 3 per cent. It will continue to monitor developments and make further adjustments as necessary.

Since the middle of July Lufthansa has been using biofuel for the first time on regular scheduled flights. Four times a day, an Airbus A321 operates the route Hamburg–Frankfurt–Hamburg with one engine powered by a 50/50 blend of normal jet fuel and the biosynthetic fuel HRJ. Over some 1,400 flights, the trial will investigate the effects of the alternative fuel on engines and emissions.

The Lufthansa corporate bonus programme PartnerPlusBenefit celebrated its tenth anniversary in September. The programme was introduced in 2001 for small and medium-sized companies in Germany and gives them the opportunity to benefit from corporate incentives.

The planned joint venture between Lufthansa Passenger Airlines and the Japanese airline ANA has already been approved by the competition authorities and is set to start operations in April 2012. The collaboration will include the coordination of sales activities and the introduction of joint flight plans.

At the World Airline Awards 2011 Lufthansa was voted "Best Transatlantic Airline". Lufthansa Passenger Airlines was also chosen as "Best Business Class in German and European Traffic" and "Best Airline Website for Business Travellers" by the readers of the magazine Business Traveller Deutschland. The computer magazine Chip declared Lufthansa FlyNet to be its "Product of the Year 2011".

In view of the worsening sales and bookings situation, with simultaneous cost pressure from the unchangedly high oil price, Lufthansa Passenger Airlines is assuming that it will not be able to match last year's operating result for the full year 2011, despite the increase in revenue.

Other Group airlines

SWISS
		Jan. – Sept. 2011	Jan. – Sept. 2010	Change in %
Revenue	€m	2,957	2,556	15.7
Operating result	€m	244	194	25.8
EBITDA	€m	440	364	20.9
Passengers carried	thousands	12,386	11,323	9.4
Employees as of 30.9.	number	7,897	7,642	3.3

Further information on SWISS can be found at www.swiss.com.

SWISS closed the third quarter 2011 in line with expectations. In the first nine months of the year the airline generated revenue of EUR 3.0bn, 15.7 per cent more than last year. The operating result was even 25.8 per cent up on the previous year at EUR 244m. Strong demand in the summer months and a high load factor for the fleet made it possible to compensate for various adverse effects, in particular the strong exchange rate for the Swiss franc. This put the Swiss airline at a competitive disadvantage in Europe and its home market. Average yields also remained under pressure given the extensive capacity available on the market.

Passenger numbers continued to grow in a very satisfactory manner. In the first nine months they rose by 9.4 per cent year on year to a total of 12.4 million passengers. In parallel SWISS increased its capacities by 10.3 per cent. The passenger load factor came to 81.5 per cent (–0.8 percentage points).

SWISS continues to follow a moderate growth path and is successively updating its fleet in line with the latest standards. From 2012 it will expand its fleet by five Airbus A330-300s, three A320s and two A321s. From 2014, it is to replace its Avro-RJ regional fleet completely by more environmentally friendly aircraft from the Bombardier C-Series. In total, 40 new aircraft are to be delivered to SWISS over the next few years.

Since September SWISS has had a uniformly modern Business Class on all long-haul routes and also offers a First Class service on all intercontinental routes.

In the years ahead, SWISS intends to reinforce its position and its image as "the airline of Switzerland". Its brand profile is being sharpened up, starting in October. This is to be accompanied by the introduction of a new logo and slogan ("Our sign is a promise") and publicised by a new advertising campaign.

Considering the result for the first nine months, SWISS is still expecting revenue growth for the full year 2011 and a result on plan, which should be similar to previous year's level.

Austrian Airlines

		Jan. – Sept. 2011	Jan. – Sept. 2010	Change in %
Revenue	€m	1,549	1,538	0.7
Operating result	€m	–34	–47	27.7
EBITDA	€m	102	108	–5.6
Passengers carried	thousands	8,575	8,370	2.5
Employees as of 30.9.	number	6,836	7,060	–3.2

Further information on Austrian Airlines can be found at www.aua.com.

The traffic figures for Austrian Airlines improved significantly year on year in the first nine months of 2011, especially on European routes. The important Japanese route also showed clear signs of recovery.

Austrian Airlines was able to increase passenger numbers by 2.5 per cent to around 8.6 million. The load factor sank compared with last year by 3.1 percentage points to 74.1 per cent, as capacity was increased by 5.0 per cent but sales only grew by 0.8 per cent.

Revenue was at the same level as last year at EUR 1.5bn. The operating result improved to EUR –34m, however, an increase of EUR 13m compared with last year.

As of 1 November 2011 Jaan Albrecht is to become Chairman of the Executive Board and CEO of Austrian Airlines. The Executive Board will then have three members, who will pursue Austrian Airlines' strategy consistently with the aim of achieving a return to competitiveness and profitability. In the process Austrian Airlines shall be integrated as a sustainable and successful member of the Lufthansa airline group.

Even in times of economic disquiet, Austrian Airlines remains true to its quality promise. 32 medium-haul aircraft have been fitted with the new Europa cabin; in winter 2012/13 the cabins of the long-haul fleet are also to be completely overhauled. Ten Boeing 777s and B767s will then also be equipped with new modern Economy Class seats, the new in-flight entertainment system and new Business Class seats.

The developments in the first nine months of this year meant that the market situation for Austrian Airlines has become considerably more difficult than originally expected. The crises in Japan and the Middle East are still having a substantial adverse effect on earnings. Despite the countermeasures taken, achieving a positive operating result for 2011 appears to be beyond reach. Austrian Airlines is nevertheless still working on the assumption that it can improve its operating result in comparison with 2010.

British Midland

		Jan. –Sept. 2011	Jan. –Sept. 2010	Change in %
Revenue	€m	658	696	–5.5
Operating result	€m	–154	–90	–71.1
EBITDA	€m	–129	–68	–89.7
Passengers carried	thousands	4,494	4,854	–7.4
Employees as of 30.9.	number	3,811	3,686	3.4

Further information on British Midland can be found at www.flybmi.com.

The poor state of the economy in the United Kingdom and the crises in North Africa and the Middle East are having a highly negative impact on revenue and earnings at British Midland in 2011. At EUR 658m revenue was 5.5 per cent below the figure for last year. Despite the lower costs achieved by the restructuring activities it was nevertheless impossible to maintain last year's result. The operating result came in at EUR –154m (previous year EUR –90m).

British Midland is still vigorously pursuing its strategy of replacing loss-making routes. This led to the closure of the base in Glasgow and a reduction of capacities on flights to Berlin. On the other hand, new routes to Casablanca, Marrakech, Bergen, Stavanger and Nice were included in the flight timetable. Since October 2011 new flights have also been on offer to Amritsar and Agadir. Flights to Tripoli are still suspended and some flights to Damascus can also not be carried out because of the disturbances on the ground.

In order to improve short-term earnings at bmibaby, a decision was taken to close the bases in Manchester and Cardiff as of the winter flight plan 2011/12. To improve the financial situation six slots at London Heathrow were sold, which were either already leased to other airlines or could not be used profitably by British Midland.

Due to these ongoing difficulties British Midland does not expect to be able to match last year's revenue and operating result for the full year 2011. As part of its strategy process, the airline has launched another project to improve its earnings position. The aim is to achieve profitability in the medium term by means of greater focus. Further steps are being investigated in parallel, such as various disposals and strategic options.

Germanwings

		Jan.–Sept. 2011	Jan. –Sept. 2010	Change in %
Revenue	€m	530	486	9.1
Operating result	€m	–23	–11	–109.1
EBITDA	€m	4	13	–69.2
Passengers carried	thousands	5,782	5,950	–2.8
Employees as of 30.9.	number	1,294	1,279	1.2

Further information on Germanwings can be found at www.germanwings.com.

In the first nine months of 2011 Germanwings carried a total of 5.8 million passengers (–2.8 per cent). The company reduced its capacities at an early stage, especially in view of the expected fall in demand following the introduction of the air traffic tax. This enabled the passenger load factor to be improved year on year by 1.2 percentage points to 79.0 per cent. Average yields were raised substantially at the same time.

Altogether, revenue in the first nine months came to EUR 530m. This corresponds to an increase of 9.1 per cent compared with last year. Significant additional costs were incurred for the air traffic tax and above all due to the much higher fuel price. Germanwings therefore reported an operating result of EUR – 23m (previous year: EUR –11m).

The heightened cooperation with Lufthansa made a vital contribution to the revenue increase. Germanwings has been a Miles & More partner since 2010. In addition, global distribution systems have been able to combine flights from Germanwings and Lufthansa since January 2011. The scope of collaboration in corporate customer business was also extended.

Despite the ongoing economic uncertainty, Germanwings is expecting revenue to stay above last year's for the remaining months in 2011, with higher average yields and passenger load factors. As no significant respite is anticipated in terms of costs and as competition remains intense, Germanwings is nevertheless now expecting its operating result for the current year to be below last year's, in spite of the steps taken to safeguard earnings.

Logistics business segment

Key figures Logistics

		Jan. – Sept. 2011	Jan. – Sept. 2010	Change in %	July – Sept. 2011	July – Sept. 2010	Change in %
Revenue	€m	2,220	2,014	10.2	717	731	–1.9
of which with companies of the Lufthansa Group	€m	19	18	5.6	6	6	0.0
Operating result	€m	173	230	–24.8	40	86	–53.5
Segment result	€m	173	240	–27.9	36	84	–57.1
EBITDA	€m	242	335	–27.8	58	119	–51.3
Segment capital expenditure	€m	42	11	281.8	7	7	0.0
Employees as of 30.9.	number	4,612	4,499	2.5	4,612	4,499	2.5
Freight and mail	thousand tonnes	1,413	1,304	8.4	460	474	–3.0
Available cargo tonne-kilometres	millions	10,269	9,142	12.3	3,367	3,377	–0.3
Revenue cargo tonne-kilometres	millions	7,120	6,504	9.5	2,352	2,334	0.8
Cargo load factor	%	69.3	71.1	–1.8 pts	69.9	69.1	0.8 pts

Course of business After starting the year with strong growth, the general decline in economic demand over the following months is also reflected in Lufthansa Cargo's business. In the reporting period the company was nonetheless able to increase both freight volumes and revenue. The operating profit achieved was the second highest in the company's history.

Segment structure In addition to Lufthansa Cargo AG, the Logistics segment consists of Lufthansa Cargo Charter Agency GmbH, the airfreight container management specialist Jettainer GmbH and the equity investments in the cargo airlines Jade Cargo International Ltd. and AeroLogic GmbH. Lufthansa Cargo also markets freight capacities on passenger aircraft operated by Lufthansa Passenger Airlines and Austrian Airlines. Furthermore, Lufthansa Cargo holds equity interests in various sales support and handling companies.

In the reporting period Lufthansa Cargo sold its share of the equity investment in LifeConEx to DHL Global Forwarding. This is part of continued strategic concentration on the airport-to-airport business.

Product and route network Driven by the first six months, Lufthansa Cargo increased its capacities significantly year on year in the reporting period. This additional capacity came mainly from the MD-11 cargo aircraft reactivated following the crisis, the Boeing 777 freighters delivered to AeroLogic in the course of last year and Austrian Airlines' capacity, which has been integrated since July 2010. Flexible and demand-oriented network and capacity management remains of the utmost importance for Lufthansa Cargo, in order to respond to volatile demand in the airfreight industry. Growth potential was also actively exploited in

the reporting period. Lufthansa Cargo's new additions to its route network include Lahore (Pakistan), Houston (USA), Kolkata (India), Dhaka (Bangladesh), Beijing (China) and Seoul (South Korea). This year Lufthansa Cargo also became the first airline to obtain US SAFETY Act certification from the US Department of Homeland Security. This means that the safety checks carried out by the cargo airline for exports from the USA have been certified.

Operating performance Traffic figures at Lufthansa Cargo developed well in the first three quarters of the year and much better than the industry average – despite the tangible slowdown in the rate of economic growth which affected Lufthansa Cargo as well. The volume transported went up by 8.4 per cent. Revenue tonne-kilometres also developed well, rising by 9.5 per cent. As capacity was increased by 12.3 per cent at the same time, the cargo load factor fell by 1.8 percentage points to 69.3 per cent; see also table on p. 19 .

Exports to America drove the positive trend in this traffic region. In the Asia/Pacific region demand ex China was still soft, resulting in below-average volume growth and pricing pressure. Demand from India also slackened somewhat. In Africa the downhill trend from the second quarter continued. The main problem was a shortage of volumes from North African and Middle Eastern markets, which was not made good by those in South Africa and Kenya.

Revenue and earnings development Lufthansa Cargo increased revenue by 10.2 per cent to EUR 2.2bn. Traffic revenue accounted for the bulk of the growth and was 11.3 per cent up on last year at EUR 2.1bn.

Other revenue came to EUR 83m (–11.7 per cent). It consisted largely of income from ad hoc aircraft chartering and freight handling. Due to one-off effects last year, other operating income came to EUR 54m (–25.0 per cent).

Total operating income rose to EUR 2.3bn (+9.0 per cent).

Operating expenses went up by 13.2 per cent to EUR 2.1bn in the period under review. This increase was largely driven by the higher cost of materials and services, which were up 17.2 per cent at EUR 1.5bn. In line with the steep rise in the kerosene price, fuel expenses soared by EUR 113m to EUR 371m (+43.8 per cent). Fees and charges went up by 12.4 per cent to EUR 226m due largely to higher volumes. Higher belly expenses drove up charter costs by 9.2 per cent to EUR 783m. The more intensive use of the fleet and the ensuing increase in maintenance inspections meant that MRO expenses were 12.2 per cent higher than last year at EUR 101m.

Staff costs picked up by 6.6 per cent to EUR 259m because of higher basic pay and performance-related components as well as a slight increase in staff numbers. Pilot capacities were ramped up as laid-up aircraft were brought back into service. In the reporting period the segment had an average of 4,551 employees (+2.2 per cent).

Depreciation and amortisation was 22.4 per cent lower than the previous year at EUR 66m. This is largely due to the end of depreciation for the MD-11 freighters acquired in 1998 and 1999.

Other operating expenses totalled EUR 228m (+10.1 per cent). This stems from higher travel expenses, Group services, rental and maintenance expenses, and write-downs on receivables.

In the first nine months of 2011 Lufthansa Cargo achieved an operating result of EUR 173m. This represents the second-best result in the company's history, but is well below last year's record figure (EUR 230m). The segment result also came to EUR 173m (previous year: EUR 240m). It was depressed by a loss of EUR 8m from the subsidiaries accounted for using the equity method. The main reason was the realisation of losses accrued in prior years in connection with capital contributions to Jade Cargo International Ltd. The loss was made good by other segment income of EUR 8m, which stemmed largely from write-backs of provisions.

Segment capital expenditure came to EUR 42m (previous year: EUR 11m). This sharp increase was due largely to the down payment for five Boeing 777F aircraft. The capital contribution to Jade Cargo International Ltd. and scheduled additions to office and operating equipment also led to greater investing activities.

Forecast Faltering economic growth will also have an impact on business at Lufthansa Cargo. Until the ruling by the Hesse administrative court on the night-flight ban at Frankfurt Airport, Lufthansa Cargo was nonetheless still assuming good revenue and earnings for the fourth quarter 2011, despite this economic uncertainty. The ban on night flights is now provisionally in force from 30 October 2011 until a definitive ruling is made by the Federal Administrative Court. This will have a drastic impact on flight operations at Lufthansa Cargo, as ten flights per night were scheduled for the Frankfurt winter flight plan on average and these cannot all be transferred to daytime slots. It is too early to say exactly how bad the effects of the provisional night-flight ban on tonnage and revenue developments will be. All in all, Lufthansa Cargo nevertheless still expects revenue for the financial year 2011 to be higher than last year and the operating result to be substantially positive, albeit lower than last year.

	Net traffic revenue in €m external revenue*			Freight/mail in thousand tonnes		Available cargo tonne kilometres in millions		Revenue cargo tonne kilometres in millions		Cargo load factor in %
	Jan. – Sept. 2011	Change in %	Jan. – Sept. 2011	Change in %	Jan.– Sept. 2011	Change in %	Jan.– Sept. 2011	Change in %	Jan. – Sept. 2011	Change in pts
Europe	184	21.1	470	6.1	616	6.9	282	7.6	45.8	0.3
America	797	26.5	431	12.8	4,215	15.6	2,994	11.8	71.1	–2.4
Asia/Pacific	974	–0.4	404	7.2	4,505	10.7	3,290	7.7	73.0	–2.1
Middle East/Africa	166	11.4	108	5.7	933	9.5	554	9.3	59.4	–0.1
Total	2,121	11.1	1,413	8.4	10,269	12.3	7,120	9.5	69.3	–1.8

Trends in traffic regions Lufthansa Cargo

* Excluding extra charter.

MRO business segment

Key figures MRO

		Jan. – Sept. 2011	Jan. – Sept. 2010	Change in %	July – Sept. 2011	July – Sept. 2010	Change in %
Revenue	€m	3,048	2,983	2.2	1,001	1,009	–0.8
of which with companies of the Lufthansa Group	€m	1,326	1,209	9.7	445	407	9.3
Operating result	€m	198	211	–6.2	92	66	39.4
Segment result	€m	232	238	–2.5	101	74	36.5
EBITDA	€m	302	301	0.3	101	123	–17.9
Segment capital expenditure	€m	78	40	95.0	27	12	125.0
Employees as of 30.9.	number	19,889	20,244	–1.8	19,889	20,244	–1.8

Course of business Maintenance, repair and overhaul (MRO) services are increasingly in demand again in many regions, but altogether rather less than expected. The effects of political unrest in Lufthansa Technik's important Middle Eastern and North African markets led to sharp falls in revenue there. Furthermore, there is a distinct reluctance to sign new contracts. The global expansion of MRO capacities – particularly in Eastern Europe and Asia – has also brought severe pricing pressure to the MRO business.

Despite these challenges Lufthansa Technik reported a slight increase in revenue for the first nine months of 2011, but was not able to match last year's very good operating result. Lost revenue and earnings in the crisis regions of North Africa as well as provisions for long-term contracts weighed on the result for the reporting period.

To ensure competitiveness, the ESP@LHT programme to safeguard earnings was launched in June, which will make an important contribution to stabilising the earnings situation alongside the projects introduced earlier. Initial successes have already delivered lower costs in the current year.

Segment structure The Lufthansa Technik group consists of 32 technical maintenance operations around the world, including the main site. The company holds direct and indirect stakes in 54 companies, of which 22 are in Germany, 15 in Europe, ten in America, and seven in Asia and Australia. Lufthansa Technik is to expand the site in Sofia by two bays for overhauling aircraft, which will make the entire network even more competitive. Regional customers such as Bulgaria Air or Air Tatarstan have already signed wide-ranging, long-term maintenance contracts with the company at that location and therefore contribute to securing its growth.

Products Lufthansa Technik is the world market leader in the field of civil aircraft, with a portfolio ranging from the total technical support of whole customer fleets to individual completion programmes for VIP aircraft. In 2011 it was awarded "Best MRO Provider in Europe".

The company is currently making intensive preparations to offer services for new aircraft models, such as the Boeing 787 and B747-8. The first B787 was handed over to the Japanese airline ANA on 26 September 2011. Shortly beforehand, Lufthansa Technik successfully won Japan Airlines as the first component-support customer for this new aircraft. The Total Component Support contract for its fleet of 35 B787s is to run for 10 years. In addition, Lufthansa Technik has signed a long-term service contract with Hamilton Sundstrand for B787 components. As partner in its network the company can now develop and apply sophisticated repair processes.

In the VIP unit several VIP refits are to be completed on Boeing 747-8is in the years ahead; one contract has already been closed and another is due to be signed in October. The maintenance unit is also currently preparing for the introduction of the B747-8i at Lufthansa Passenger Airlines next year.

On 22 September 2011 Lufthansa Technik handed over the first Bombardier Global 5000 aircraft to the German Federal Ministry of Defence. Another three planes from this series are to be delivered by the end of the year, which will conclude the fleet renewal programme for the German federal government. Now that the installation of the new Europa cabin for Lufthansa Passenger Airlines has been largely completed, the roll-out of other innovative products has been launched successfully, including Business and First Class refits as well as FlyNet equipment (internet on board).

In the years ahead, Lufthansa Technik also intends to invest more in research and development, to reduce aircraft weight and fuel consumption, for instance.

Operating performance In the year to date, Lufthansa Technik succeeded in securing about 280 new contracts with a total volume of EUR 442m for the full year 2011. This meant it both had more customers and serviced more aircraft than in 2010.

Besides the successful entry into Boeing 787 component support, Lufthansa Technik managed to win further important new contracts with Asian customers, such as a Total Technical Support contract with Nok Air for the maintenance and overhaul of its Boeing 737NG fleet. In addition, a Total Component Support contract was signed with Peach Aviation for 16 Airbus A320 aircraft.

A contract was signed with Qantas Airways for the overhaul of Airbus A330 landing gear. Other customers have renewed their engine contracts with Lufthansa Technik, such as Aegean and Ethiopian Airlines. Virgin Atlantic and Lufthansa Technik have also signed a letter of intent on expanding their cooperation in the area of C checks and thrust reverser services for the Boeing 747 and the Airbus A340 fleets.

Revenue and earnings development Lufthansa Technik's income from Group companies rose by 9.7 per cent to EUR 1.3bn, above all thanks to more modification programmes as well as new contracts and contract extensions with various companies in the Lufthansa Group. External revenue sank by EUR 52m (–2.9 per cent) to EUR 1.7bn. Higher revenue in component servicing was more than offset by fewer orders from customers in North Africa, less customer business at some subsidiaries and the adverse movement of the US dollar. Overall, revenue rose year on year by 2.2 per cent to EUR 3.0bn.

Other operating income went up by EUR 15m to EUR 161m, primarily due to exchange rate movements relating to the reporting date.

The MRO segment generated a total operating income of EUR 3.2bn (+2.6 per cent).

Operating expenses went up in line with revenue by 3.2 per cent to EUR 3.0bn in total, which is largely the result of higher costs for materials and external services (+3.7 per cent) for aircraft idle time and engine maintenance.

Staff costs remained roughly stable at EUR 809m (+0.5 per cent) despite higher pension provisions and one-off expenses in some subsidiaries. The average number of employees declined compared with last year by 596 to 19,767. The workforce of the MRO group was also particularly reduced at plants – such as Hawker Pacific, Lufthansa Technik Switzerland or Shannon Aerospace – currently carrying out or having recently completed restructuring programmes to ensure their long-term competitiveness.

Whereas depreciation and amortisation fell by 4.3 per cent to EUR 66m, other operating expenses rose by 6.8 per cent to EUR 578m. This was due in particular to provisions for long-term engine maintenance contracts.

Lufthansa Technik therefore posted an operating result of EUR 198m for the first three quarters of 2011, meaning it was unable to match the previous year's very good operating result (EUR 211m).

The equity result of EUR 15m was at the same level as last year. Higher other segment income (+EUR 9m to EUR 21m) from writebacks of provisions contributed to a segment result of EUR 232m, just below last year's figure of EUR 238m.

Compared with the previous year (EUR 40m), the segment's capital expenditure rose significantly to EUR 78m. This consists principally of reserve engines purchased by Lufthansa Technik Airmotive Ireland and a Pratt & Whitney licence acquired by Lufthansa Technik Aero Alzey. Equity of EUR 4m was also provided for Lufthansa Technik Milan and the newly established joint venture with Panasonic IDAIR.

Forecast For the full year Lufthansa Technik is still expecting a substantially positive operating result – with a slight increase in overall revenue – which will be lower than last year's, however.

From 2012 Lufthansa Technik is again expecting a higher operating result. Alongside an economic recovery in Lufthansa Technik's important Middle Eastern and North African sub-markets the company continues to attach great importance to strict cost and efficiency management, which is centralised in the programme to safeguard earnings (ESP@LHT). An early product entry for the new aircraft models Boeing 787 and B747-8 will contribute to this positive development, as will the group management strategy of expanding the best sites and restructuring the critical ones. Key challenges lie in the significant global expansion of available MRO capacities and the price and capacity utilisation risks this brings.

IT Services business segment

Key figures IT Services

		Jan. – Sept. 2011	Jan. – Sept. 2010	Change in %	July – Sept. 2011	July – Sept. 2010	Change in %
Revenue	€m	436	438	–0.5	147	147	0.0
of which with companies of the Lufthansa Group	€m	268	263	1.9	89	89	0.0
Operating result	€m	12	12	0.0	6	4	50.0
Segment result	€m	9	3	200.0	5	–4	–
EBITDA	€m	38	37	2.7	16	13	23.1
Segment capital expenditure	€m	25	25	0.0	9	9	0.0
Employees as of 30.9.	number	2,846	2,955	–3.7	2,846	2,955	–3.7

Course of business Lufthansa Systems had a successful first nine months of 2011. The company's revenue was slightly down on last year, but the restructuring programme is increasingly having an effect. Lower staff costs in particular meant that the operating result could be improved again to the previous year's level.

Segment structure Lufthansa Systems offers solutions for all of the business processes of an airline and also IT services for transport/logistics, industry, energy, media/publishing, healthcare and tourism. The group has several branches in Germany and following the opening of offices in London and Dubai now has foreign bases in 16 countries.

Products The company provides a number of innovative mobile solutions, including BoardConnect, the navigation chart solution Lido/iRouteManual for the iPad and other apps. Outside the airline industry, Lufthansa Systems offers IT services spanning everything from consultancy to developing industry solutions and managing routine operations. Furthermore, sector solutions such as VI&VA for publishers and media companies and the infotainment system for cruise ships are reporting increasing demand.

Operating performance In the reporting period Lufthansa Systems was again able to close numerous contracts. The company was appointed by Malaysia Airlines to manage its global data network. After Condor, Virgin America also decided in favour of BoardConnect. British Airways has renewed the contract for flight path planning with Lido/Flight. Lufthansa Passenger Airlines extended a number of key contracts. In the logistics sector Lufthansa Systems provides consultancy services to Hamburg Süd, Schenker Deutschland and Hamburg Port Authority. Gesundheit Nord GmbH has placed an order for merging all the SAP systems in the four hospitals that form the Bremen clinic group.

Following the merger of five individual companies, the reorganisation of the company was completed with the implementation of a new market-oriented structure with clear profit and loss responsibility. The aims are to reduce complexity and thereby to cut costs.

Revenue and earnings development In the first nine months of 2011 Lufthansa Systems generated revenue of EUR 436m, which was slightly down on last year (–0.5 per cent). Revenue from Lufthansa Group companies rose by 1.9 per cent to EUR 268m due to greater volumes. As the sector portfolio was adjusted, revenue with external customers fell from EUR 175m to EUR 168m. Other operating income declined by EUR 2m to EUR 19m, taking total operating income down by 0.9 per cent compared with last year to EUR 455m as a result.

Total operating expenses fell by EUR 4m to EUR 443m. The cost of materials and services rose by EUR 3m to EUR 59m. Staff costs were down 3.9 per cent to EUR 171m due to the reduction in the average headcount from 2,983 employees to 2,864. Depreciation was stable year on year at EUR 25m. Other operating expenses also remained stable at EUR 188m. The action taken as part of the Jetzt! programme is having an effect and resulted in a distinct improvement in the earnings situation in the third quarter. The operating result for the reporting period was the same as last year at EUR 12m. The segment result came to EUR 9m, whereby last year's figure of EUR 3m was the result of impairment losses. Segment capital expenditure was unchanged at EUR 25m.

Forecast For the full year, revenue will be slightly lower than last year's. The Jetzt! programme is nevertheless already delivering significant earnings contributions. The steps taken to date will lighten the cost base by around EUR 11m in 2011. Lufthansa Systems is therefore still expecting an operating result that is above last year's. As part of the realignment, talks are also being held to investigate a potential strategic partnership.

IT Services To our shareholders Interim management report | Interim financial statements | Further information

Catering

Catering business segment

Key figures Catering

		Jan. – Sept. 2011	Jan. – Sept. 2010	Change in %	July – Sept. 2011	July – Sept. 2010	Change in %
Revenue	€m	1,710	1,674	2.2	621	618	0.5
of which with companies of the Lufthansa Group	€m	420	396	6.1	150	139	7.9
Operating result	€m	56	50	12.0	35	37	–5.4
Segment result	€m	64	63	1.6	39	43	–9.3
EBITDA	€m	101	149	–32.2	42	–3	–
Segment capital expenditure	€m	51	23	121.7	21	6	250.0
Employees as of 30.9.	number	29,687	28,435	4.4	29,687	28,435	4.4

Course of business Passenger numbers rose year on year in the first nine months of 2011, despite adverse external influences. All the regions in which LSG Sky Chefs operates were able to benefit from this trend. At the same time the company was able to compensate for cost increases and generate a higher operating result than in the same period last year.

Segment structure The LSG Sky Chefs group consists of 147 companies with approximately 200 sites in 50 countries. The parent company for the group, LSG Lufthansa Service Holding AG, is based in Neu-Isenburg. The group of consolidated companies was expanded by a total of 15 companies compared with 30 September 2010. Eleven of the newly consolidated companies are in Germany and result from the restructuring of LSG Sky Chefs Deutschland GmbH into one management company and 12 local operating companies as of 1 July 2011.

Products The products and services from LSG Sky Chefs have won regional and local awards from customers, trade associations and other juries. Last year's prizewinning lightweight "Quantum" trolley is successively being rolled out on all Lufthansa long-haul flights. The company was also able to enter adjoining markets, such as hospital catering in Germany for instance.

Operating performance The new customer contracts successfully acquired in the first nine months, such as British Midland in Great Britain and Primera Air in Scandinavia, got off to a good start. A large number of major orders were renewed, including those from United Airlines, GOL, TAM, COPA and Germanwings. The joint venture with Nanjing Airport was prolonged in advance until 2026. Since June 2011 LSG Sky Chefs has been back in Chicago with its own local facilities. The joint venture with First Catering in Zurich went into operation in May. The companywide initiative Upgradeplus to implement sustainable cost cuts and realise growth potential is meeting expectations and is being continued.

Revenue and earnings development Revenue in the Catering segment continued to develop well in the first nine months of 2011. It rose year on year by 2.2 per cent to EUR 1.7bn (adjusted for exchange rates: +3.8 per cent), principally due to higher passenger numbers. External revenue came to EUR 1.3bn (+0.9 per cent); at the same time internal revenue from companies in the Lufthansa Group rose by 6.1 per cent to EUR 420m. Other operating income fell, largely due to lower exchange rate gains, by EUR 6m to EUR 42m.

Total operating income picked up by 1.7 per cent to EUR 1.8bn. Total operating expenses were 1.4 per cent up on the year at EUR 1.7bn. The cost of materials and services went up by 2.8 per cent to EUR 764m. Despite a 2.6 per cent increase in the workforce to 29,080, staff costs remained roughly stable compared with last year (+0.3 per cent) at EUR 595m. Depreciation and amortisation was 4.5 per cent below last year's at EUR 42m. Other operating expenses amounted to EUR 295m (+1.0 per cent).

In the first nine months of 2011, LSG Sky Chefs achieved an operating profit of EUR 56m, EUR 6m more than last year. At EUR –2m, the balance of other segment income and expenses was lower than the previous year's figure of EUR 1m. The result of financial investments accounted for using the equity method was also EUR 2m lower at EUR 10m. The segment result was therefore ultimately EUR 64m (previous year: EUR 63m).

Segment capital expenditure of EUR 51m was EUR 28m higher than in the same period last year, in which it had been restricted to the amount necessary for maintenance and securing operations as part of the activities to safeguard earnings.

Forecast LSG Sky Chefs will continue the sustainable reorganisation of the company at dampened revenue expectations. For the full year 2011 the company still expects revenue and operating result to be higher than last year.

Other

		Jan. – Sept. 2011	Jan. – Sept. 2010	Change in %	July – Sept. 2011	July – Sept. 2010	Change in %
Total operating income	€m	954	962	–0.8	304	257	18.3
Operating result	€m	–9	–114	92.1	–9	15	–
Segment result	€m	–34	–88	61.4	–42	19	–
EBITDA	€m	400	308	29.9	331	33	903.0
Segment capital expenditure	€m	16	12	33.3	4	5	–20.0
Employees as of 30.9.	number	3,953	3,740	5.7	3,953	3,740	5.7

Structure The segment Other includes the service and financial companies which incorporate the Lufthansa Group's financial and service activities. This includes AirPlus, Lufthansa Flight Training and Lufthansa Commercial Holding. The central Group functions of Deutsche Lufthansa AG are also assigned to this segment.

Companies' performance The growth of the international business travel market continued in the third quarter 2011. AirPlus billed 15 per cent more worldwide air travel in the quarter than in the same period a year ago – total billing revenue even went up year on year by 21 per cent. Total revenue was 27.9 per cent down on last year at EUR 212m, largely due to exchange rate movements. Nevertheless, the operating result improved at the same time by EUR 8m to EUR 25m.

Lufthansa Flight Training profited from increasing demand for simulator training in the reporting period as well as for basic courses in the flight assistant training programme for Lufthansa Passenger Airlines. The revenue contribution from Lufthansa Flight Training went up year on year by 9.0 per cent to EUR 133m. The operating result improved to EUR 29m (previous year: EUR 27m).

The result of the Group functions was largely determined by exchange rate movements. As in the two preceding quarters, the net exchange rate result was positive. Total operating income climbed by 10.8 per cent to EUR 574m. The operating result improved to EUR –75m (previous year: EUR –165m).

Revenue and earnings development In the reporting period the segment Other generated total revenue of EUR 954m, just short of the figure for last year (–0.8 per cent). Operating expenses sank by 10.5 per cent to EUR 963m, primarily as a result of exchange rate movements. In the first nine months of 2011 the segment reported a much improved operating result of EUR –9m (previous year: EUR –114m). The segment result also rose sharply from EUR –88m to EUR –34m.

To our shareholders Interim management report | Interim financial statements | Further information

Other Risk and opportunities report Supplementary report

Risk and opportunities report

As an international aviation company Lufthansa is exposed to macroeconomic, sector-specific and Company risks. These consist primarily of market and competition risks which affect capacity and load factors. In addition, there are political, operational and collective bargaining risks, legal risks and contingencies, procurement risks, IT risks and financial and treasury risks.

Our permanently updated management systems make it possible to identify both risks and opportunities at an early stage and act accordingly. For detailed information on the opportunity and risk management system and the Group's risk situation, please see p. 132 of the Annual Report 2010.

In the first three quarters of 2011 the opportunities and risks for the Group described in detail in the annual report have materialised or developed as follows:

Expectations for the further development of the global economy have dimmed considerably over the course of the year. Around the world, the risks attributable to the financial crisis in Europe, the lack of economic recovery in the USA and the slowing growth in the emerging markets are now considered to be greater than at the beginning of the year.

Growth in global passenger traffic has continued, but the pace of expansion has been dropping for months. At the same time, available capacities are exceeding demand. Although Lufthansa is in a position to be able to sell most of the capacity that has increased since last year, there is still immense price pressure in the current competitive environment, especially in European traffic. Whereas traffic to and from Japan is increasingly returning to normal, the political unrest in the Arab countries is still responsible for lower passenger demand. The crises continue to have an adverse effect on the companies' profitability. This relates in particular to British Midland and Austrian Airlines given the structure of their flight routes.

In spite of increasing uncertainty about the future development of the world economy, crude oil and kerosene prices only fell slightly in the third quarter and remain at high levels. Thanks to its proven hedging policy, the Lufthansa Group has not felt the full effect of these high fuel prices on earnings. Nonetheless, this compensatory effect is set to diminish in the fourth quarter, so that in a still highly competitive market it cannot be assumed that the additional costs can be absorbed in full.

Considering the particular macroeconomic situation and all other known issues and circumstances, there are however currently no identifiable developments which could endanger the Company's continued existence.

Supplementary report

On 10 October 2011 the Hesse administrative court surprisingly enacted a ban on night flights for Frankfurt Airport in the period 11.00 p.m. to 5.00 a.m. The injunction is provisional and will remain in force until the hearing at the Federal Administrative Court in spring 2012. This causes considerable disruption to flight operations for the airlines in the Lufthansa Group. The companies, in particular Lufthansa Cargo and Lufthansa Passenger Airlines, are currently reviewing adjustments to their flight plans in response to this massive restriction.

Forecast

GDP development

in %	2011*	2012*	2013*	2014*	2015*
World	3.0	3.0	3.8	4.3	4.2
Europe	1.9	0.8	1.8	2.3	2.4
Germany	3.0	1.0	1.5	1.8	1.6
North America	1.7	1.4	2.4	3.5	3.3
South America	4.0	3.5	4.5	4.9	4.3
Asia/Pacific	4.6	5.4	6.0	6.1	5.9
China	9.3	8.1	8.6	8.5	8.2
Middle East	5.4	5.0	4.6	4.8	4.4
Africa	1.6	4.8	5.8	5.6	5.0

Source: Global Insight World Overview as of 15.10.2011.

* Forecast.

General economy and sector The outlook for the world economy has become much gloomier over the course of the year. After the gross domestic product expanded by 4.2 per cent last year, global growth of 3.0 per cent overall is forecast for 2011.

The US economy is likely to remain weak and post year-on-year growth of just 1.7 per cent in 2011. By contrast, relatively robust growth of 4.6 per cent is predicted for the economies in Asia. This development will be driven again by China and India. The effects of the catastrophic earthquake in March this year can still be seen clearly in the Japanese economy and are expected to result in a slight contraction for 2011. Growth prospects for Europe have also been revised downwards. Indicators nevertheless suggest a sustained, albeit relatively small economic expansion of 1.9 per cent. Against a backdrop of decelerating exports, the economic outlook for the German economy has been sharply revised. Altogether, GDP growth of 3.0 per cent is expected for 2011, but in 2012 the economy is now only expected to expand by 1.0 per cent. This trend runs contrary to the forecast for global economic growth, which due to expected greater activity in emerging markets is currently predicted to expand 2012 at a rate of 3.0 per cent similar to 2011.

Given the darkening economic outlook, market participants are expecting oil prices to go down in the medium term. Prices on futures markets currently reflect only a slight decline, however. Futures contracts for delivery in December 2011 are currently trading at around USD 111/barrel and for December 2012 at around USD 106/barrel.

The air transport market is likely to face increasing headwinds in view of the direction forecast for global trade. Although the economic forecasts have been deteriorating since June 2011, however, passenger demand to date has held up better than expected. Under these circumstances IATA lifted its 2011 annual forecast for airline industry profits from USD 4.0bn to USD 6.9bn (2010: USD 16.0bn). In its first forecast for 2012 IATA is nonetheless counting on lower profits of around USD 4.9bn.

Lufthansa Group Altogether, Lufthansa can look back on a satisfying nine months of the 2011 financial year. The macroeconomic environment – and therefore the strength of demand for the airborne companies in particular – has weakened significantly, however. The third quarter in particular was characterised by wide swings in earnings developments. At the same time the booking prospects for the months ahead have deteriorated substantially. These trends prompted the Executive Board to adjust the earnings outlook for the full year back in September and to take opposing action. Although the assumption is still that revenue will increase, it no longer seems possible in the current environment to achieve an operating result in excess of last year's. The Executive Board is now assuming that it will record an operating profit in the upper three-digit million euro range.

Even two months before the end of the year it is not possible to give a more precise forecast of how high this profit will ultimately be, given the continuing high volatility in the market environment and the booking indicators. Among various earnings scenarios a particular risk potential could arise if the oil price continues to decouple from macroeconomic patterns of demand. This situation, which from a current viewpoint is still unlikely, could lead to additional costs for the entire industry, which in combination with lost revenue would constitute a further risk to earnings. Irrespective of the fact that many competitors would be much harder hit by such a scenario than Lufthansa, it could still endanger our current earnings forecast, depending on the degree of severity. On the other hand, a stabilisation or even a recovery in demand would have correspondingly positive effects on the Group's earnings performance. In view of the increasing loss of confidence in financial markets and governments' fiscal rectitude, this scenario cannot be used as the basis for steering the Group at the moment, however. The companies in the Group have rather prepared themselves for the challenges ahead, in some cases tightening their measures to adjust capacities and safeguard earnings. More information can be found in the respective comments.

Given the prevailing uncertainty about the level of the operating result, it is currently also impossible to give an indication of expected net profit or earnings per share. These parameters will additionally be distorted by the effects of IAS 39. Furthermore – and depending on their outcome – the strategic options currently under review, for bmi for instance, could also have a massive influence on the amount and comparability of the Group's net profit.

We continue to uphold our ambition of taking a leading role in the airline industry in terms of profitability. The business segments will be supported by the tried and tested risk management system and the Lufthansa Group's solid financial profile. Both of these offer clear competitive advantages in dealing with challenges at difficult times as well.

Despite forecast gross capital expenditure of EUR 2.7bn we are thus striving to generate a free cash flow for the full year. The defined minimum liquidity requirement of EUR 2.3bn will be exceeded comfortably by available liquid funds. The majority of the Lufthansa fleet remains owned and unencumbered. Across the Group, unencumbered aircraft currently make up 68 per cent of the fleet, in the core fleet of Lufthansa and Lufthansa Cargo they account for as much as 83 per cent. Net indebtedness will still be at an acceptable level at the end of the year. The equity ratio also remains solid, even though it will probably not be possible to achieve the target of 30 per cent again in 2011. Gearing is already within the target corridor of 40 to 60 per cent, however. Our dividend policy will be continued; it is explained in detail in the Annual Report 2010 on p. 53 and at i investor-relations.lufthansa.com/en/aktie/dividend.

The performance of the Lufthansa Group continues to be steered according to the principles of value-based management. Cash value added (CVA) is the relevant indicator. Detailed information on this management philosophy can be found in the Annual Report 2010 starting on p. 48 . Lufthansa pursues the objective of generating value over the air traffic industry's economic cycle. Altogether, in the last decade we have achieved this goal with a CVA of EUR 2.1bn. For 2011 the increasing number of adverse factors and the broader capital base mean that a positive CVA cannot be assumed at present.

Information on the economic, product and other developments in the individual segments can be found in the respective chapters.

Consolidated income statement

January – September 2011

in €m	Jan. – Sept. 2011	Jan. – Sept. 2010	July – Sept. 2011	July – Sept. 2010
Traffic revenue	18,410	16,445	6,813	6,242
Other revenue	3,728	3,748	1,262	1,326
Total revenue	22,138	20,193	8,075	7,568
Changes in inventories and work performed by entity and capitalised	53	120	29	50
Other operating income	1,740	2,032	392	566
Cost of materials and services	–12,912	–11,445	–4,559	–4,140
Staff costs	–5,072	–4,820	–1,679	–1,627
Depreciation, amortisation and impairment	–1,263	–1,240	–427	–442
Other operating expenses	–4,035	–3,971	–1,346	–1,040
Profit / loss from operating activities	649	869	485	935
Result of equity investments accounted for using the equity method	–3	28	15	32
Result of other equity investments	65	43	30	17
Interest income	141	139	45	32
Interest expenses	–355	–389	–106	–135
Other financial items	–147	17	162	–91
Financial result	–299	–162	146	–145
Profit / loss before income taxes	350	707	631	790
Income taxes	–51	–175	–133	–160
Profit / loss after income taxes	299	532	498	630
Profit/loss attributable to minority interests	–11	–8	–4	–2
Net profit / loss attributable to shareholders of Deutsche Lufthansa AG	288	524	494	628
Basic earnings per share in €	0.63	1.14	1.08	1.37
Diluted earnings per share in €	0.63	1.14	1.08	1.36

Consolidated income statement Statement of comprehensive income

Statement of comprehensive income

January – September 2011

in €m	Jan.– Sept. 2011	Jan. – Sept. 2010	July – Sept. 2011	July – Sept. 2010
Profit / loss after income taxes	299	532	498	630
Other comprehensive income
Differences from currency translation	29	203	–7	–7
Subsequent measurement of available-for-sale financial assets	–237	423	–172	61
Subsequent measurement of cash flow hedges	–85	83	–72	–572
Other comprehensive income from investments accounted for using the equity method	2	–6	0	0
Other expenses and income recognised directly in equity	–6	13	0	–11
Income taxes on items in other comprehensive income	15	–29	–10	145
Other comprehensive income after income taxes	–282	687	–261	–384
Total comprehensive income	17	1,219	237	246
Comprehensive income attributable to minority interests	–4	–5	–3	8
Comprehensive income attributable to shareholders of Deutsche Lufthansa AG	13	1,214	234	254

Consolidated balance sheet

as of 30 September 2011

Assets
in €m	30.9.2011	31.12.2010	30.9.2010
Intangible assets with an indefinite useful life*	1,545	1,582	1,573
Other intangible assets	337	329	323
Aircraft and reserve engines	11,775	11,153	11,169
Repairable spare parts for aircraft	855	877	863
Property, plant and other equipment	2,075	2,120	2,123
Investment property	–	–	3
Investments accounted for using the equity method	377	385	369
Other equity investments	897	1,128	1,046
Non-current securities	140	250	251
Loans and receivables	623	620	407
Derivative financial instruments	235	350	344
Deferred charges and prepaid expenses	23	26	29
Effective income tax receivables	51	61	60
Deferred claims for income tax rebates	39	82	5
Non-current assets	18,972	18,963	18,565
Inventories	622	662	658
Trade receivables and other receivables	4,139	3,401	3,954
Derivative financial instruments	347	484	303
Deferred charges and prepaid expenses	162	146	147
Effective income tax receivables	97	98	118
Securities	3,329	4,283	4,190
Cash and cash equivalents	1,021	1,097	1,490
Assets held for sale	136	186	76
Current assets	9,853	10,357	10,936

Total assets	28,825	29,320	29,501

* Including goodwill.

To our shareholders | Interim management report Interim financial statements | Further information

Shareholders' equity and liabilities

in €m	30.9.2011	31.12.2010	30.9.2010
Issued capital	1,172	1,172	1,172
Capital reserve	1,366	1,366	1,366
Retained earnings	3,800	2,944	2,955
Other neutral reserves	1,354	1,629	1,291
Net profit/loss	288	1,131	524
Equity attributable to shareholders of Deutsche Lufthansa AG	7,980	8,242	7,308
Minority interests	84	98	95
Shareholders' equity	8,064	8,340	7,403
Pension provisions	2,544	2,571	2,595
Other provisions	590	643	581
Borrowings	5,330	6,227	6,480
Other financial liabilities	117	110	91
Advance payments received, deferred income and other non-financial liabilities	1,156	1,087	1,066
Derivative financial instruments	110	111	93
Deferred income tax liabilities	315	405	769
Non-current provisions and liabilities	10,162	11,154	11,675
Other provisions	939	881	1,003
Borrowings	723	957	810
Trade payables and other financial liabilities	4,820	4,193	4,532
Liabilities from unused flight documents	2,929	2,389	2,740
Advance payments received, deferred income and other non-financial liabilities	1,066	1,066	1,054
Derivative financial instruments	44	103	118
Effective income tax obligations	78	237	166
Current provisions and liabilities	10,599	9,826	10,423
Total shareholders' equity and liabilities	28,825	29,320	29,501

Consolidated statement of changes in shareholders' equity

as of 30 September 2011

in €m	Issued capital	Capital reserve	Fair value measure ment of financial instru ments	Currency differ ences	Reva luation reserve (due to business combi nations)	Other neutral reserves	Total other neutral reserves	Retained earnings	Net profit/loss	Equity attrib utable to share holders of Deutsche Lufthansa AG	Minority interests	Total share holders' equity
As of 31.12.2009	1,172	1,366	118	–70	193	333	574	3,094	–112	6,094	108	6,202
Changes in accounting policies	–	–	44	–	–	–	44	–122	78	–	–	–
Adjusted as of 31.12.2009	1,172	1,366	162	–70	193	333	618	2,972	–34	6,094	108	6,202
Capital increases/reductions	–	–	–	–	–	–	–	–	–	–	–	–
Reclassifications	–	–	–	–	–	–1	–1	–34	34	–1	1	–
Dividends to Lufthansa shareholders /minority interests	–	–	–	–	–	–	–	–	–	–	–18	–18
Net profit/loss attributable to share holders of Deutsche Lufthansa AG/ attributable to minority interests	–	–	–	–	–	–	–	–	524	524	8	532
Other expenses and income recognised directly in equity	–	–	477	203	–	–6	674	17	–	691	–4	687
As of 30.9.2010	1,172	1,366	639	133	193	326	1,291	2,955	524	7,308	95	7,403
As of 31.12.2010	1,172	1,366	856	241	193	339	1,629	2,944	1,131	8,242	98	8,340
Capital increases/reductions	–	–	–	–	–	–	–	–	–	–	–	–
Reclassifications	–	–	–	–	–	–	–	856	–856	–	–	–
Dividends to Lufthansa shareholders /minority interests	–	–	–	–	–	–	–	–	–275	–275	–18	–293
Net profit/loss attributable to share holders of Deutsche Lufthansa AG/ attributable to minority interests	–	–	–	–	–	–	–	–	288	288	11	299
Other expenses and income recognised directly in equity	–	–	–307	29	–	3	–275	–	–	–275	–7	–282
As of 30.9.2011	1,172	1,366	549	270	193	342	1,354	3,800	288	7,980	84	8,064

Consolidated statement of changes in shareholders' equity Consolidated cash flow statement

Consolidated cash flow statement

January – September 2011

in €m	Jan. – Sept. 2011	Jan. – Sept. 2010	July – Sept. 2011	July – Sept. 2010
Cash and cash equivalents 1.1. 1)	1,097	1,136	1,232	1,424
Net profit/loss before income taxes	350	707	631	790
Depreciation, amortisation and impairment losses on non-current assets (net of reversals)	1,279	1,224	425	452
Depreciation and impairment losses on repairable spare parts for aircraft (net of reversals)	–2	5	–	20
Net proceeds from disposal of non-current assets	–36	–192	–2	–8
Result of equity investments	–62	–71	–45	–49
Net interest	214	250	61	103
Income tax payments /reimbursements	–228	–43	–56	–6
Measurement of financial derivatives through profit and loss	128	–26	–160	96
Change in working capital 2)	550	571	–401	–393
Cash flow from operating activities	2,193	2,425	453	1,005
Capital expenditure for property, plant and equipment and intangible assets	–1,895	–1,728	–536	–785
Capital expenditure for financial investments	–78	–21	–20	–
Increase/decrease in repairable spare parts for aircraft	22	–47	4	–29
Proceeds from disposal of non-consolidated equity investments	2	109	1	–
Proceeds from disposal of consolidated equity investments	–	–	–	–
Cash outflows for acquisitions of non-consolidated equity investments	–23	–9	–3	–1
Cash outflows for acquisitions of consolidated equity investments	–	–2	–	–
Proceeds from disposal of intangible assets, property, plant and equipment and other financial investments	344	298	57	37
Interest income	284	257	89	90
Dividends received	91	55	38	18
Net cash from/used in investing activities	–1,253	–1,088	–370	–670
Purchase of securities /fund investments	–835	–1,647	–199	–758
Disposal of securities /fund investments	1,552	667	254	473
Net cash from/used in investing and cash management activities	–536	–2,068	–315	–955
Capital increase	–	–	–	–
Non-current borrowing	145	815	32	419
Repayment of non-current borrowing	–1,181	–544	–227	–226
Other financial debt	6	81	–2	61
Dividends paid	–293	–18	–7	–5
Interest paid	–407	–379	–138	–231
Net cash from/used in financing activities	–1,730	–45	–342	18
Net increase/decrease in cash and cash equivalents	–73	312	–204	68
Changes due to currency translation differences	–3	42	–7	–2
Cash and cash equivalents 30.9.	1,021	1,490	1,021	1,490
Securities	3,329	4,190	3,329	4,190
Total liquidity	4,350	5,680	4,350	5,680
Net increase/decrease in total liquidity	–1,030	1,241	–282	314

1) Presented for the individual quarter, cash and cash equivalents as of 1 July.

2) Working capital consists of inventories, receivables, liabilities and provisions.

Notes

1) Standards applied and changes in the group of consolidated companies

The consolidated financial statements of Deutsche Lufthansa AG and its subsidiaries have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), taking account of interpretations by the IFRS Interpretations Committee (IFRIC) as applicable in the European Union (EU). This interim report as of 30 September 2011 has been prepared in condensed form in accordance with IAS 34. In preparing the interim financial statements the standards and interpretations applicable as of 1 January 2011 have been applied. The standards and interpretations mandatory for the first time as of 1 January 2011 did not have a significant effect on the Group's net assets, financial and earnings position. The changes to the group of consolidated companies also had no significant influence on the Group's net assets, financial and earnings position.

Changes in the group of consolidated companies in the period 1.10.2010 to 30.9.2011

Name, registered office	Additions	Disposals	Reason
Passenger Airline Group segment
Global Brand Management AG, Basel, Switzerland	15.11.10		Established
Lufthansa Leasing Austria GmbH & Co. OG Nr. 11, Salzburg, Austria	24.3.11		Established
Lufthansa Leasing Austria GmbH & Co. OG Nr. 12, Salzburg, Austria	24.3.11		Established
Lufthansa Leasing Austria GmbH & Co. OG Nr. 14, Salzburg, Austria	24.3.11		Established
GOAL Verwaltungsgesellschaft mbH & Co. Projekt Nr. 5 KG, Grünwald, Germany		31.12.10	Liquidation
Lufthansa Leasing GmbH & Co. Fox-Quebec oHG, Grünwald, Germany		1.1.11	Abandonment of a business purpose
Lufthansa Leasing GmbH & Co. Fox-Romeo oHG, Grünwald, Germany		1.1.11	Abandonment of a business purpose
Lufthansa Leasing GmbH & Co. Fox-Sierra oHG, Grünwald, Germany		1.1.11	Abandonment of a business purpose
Lufthansa Leasing GmbH & Co. Fox-Tango oHG, Grünwald, Germany		1.1.11	Abandonment of a business purpose
Lufthansa Leasing GmbH & Co. Fox-Uniform oHG, Grünwald, Germany		1.1.11	Abandonment of a business purpose
Lufthansa Leasing GmbH & Co. Fox-Victor oHG, Grünwald, Germany		1.1.11	Abandonment of a business purpose
Lufthansa Leasing GmbH & Co. Fox-Yankee oHG, Grünwald, Germany		1.1.11	Abandonment of a business purpose
Lufthansa Leasing GmbH & Co. Golf-Lima oHG, Grünwald, Germany		1.1.11	Abandonment of a business purpose
Lufthansa Leasing GmbH & Co. Golf-Mike oHG, Grünwald, Germany		1.1.11	Abandonment of a business purpose
Lufthansa Leasing GmbH & Co. Fox-Alfa oHG, Grünwald, Germany		11.7.11	Abandonment of a business purpose
Lufthansa Leasing GmbH & Co. Fox-Hotel oHG, Grünwald, Germany		11.7.11	Abandonment of a business purpose
Lufthansa Leasing GmbH & Co. Fox-Echo oHG, Grünwald, Germany		1.7.11	Merger
Lufthansa Leasing GmbH & Co. Fox-Delta oHG, Grünwald, Germany		1.7.11	Merger
IT Services segment
Lufthansa Systems Aeronautics GmbH, Raunheim, Germany		24.3.11	Merger
Lufthansa Systems Airline Services GmbH, Kelsterbach, Germany		24.3.11	Merger
Lufthansa Systems Berlin GmbH, Berlin, Germany		24.3.11	Merger
Lufthansa Systems Infratec GmbH, Kelsterbach, Germany		24.3.11	Merger
Lufthansa Systems Passenger Services GmbH, Kelsterbach, Germany		24.3.11	Merger
Catering segment
Charm Food Service Co. Ltd., Incheon, South Korea	1.1.11		Established
LSG Sky Chefs – First Catering Switzerland AG, Basserdorf, Switzerland	24.5.11		Established
LSG Sky Chefs Argentina S.A., Buenos Aires, Argentina	1.6.11		Consolidated for the first time
Oakfield Farms Solutions Europe Ltd., Feltham, Great Britain	1.4.11		Consolidated for the first time
LSG Sky Chefs Hamburg GmbH, Neu-Isenburg, Germany	1.7.11		Established
LSG Sky Chefs Hannover GmbH, Neu-Isenburg, Germany	1.7.11		Established
LSG Sky Chefs Bremen GmbH, Neu-Isenburg, Germany	1.7.11		Established
LSG Sky Chefs Düsseldorf GmbH, Neu-Isenburg, Germany	1.7.11		Established
LSG Sky Chefs Köln GmbH, Neu-Isenburg, Germany	1.7.11		Established
LSG Sky Chefs Frankfurt ZD GmbH, Neu-Isenburg, Germany	1.7.11		Established

To our shareholders | Interim management report Interim financial statements | Further information

Changes in the group of consolidated companies in the period 1.10.2010 to 30.9.2011

Name, registered office	Additions	Disposals	Reason
Catering segment
LSG Sky Chefs Frankfurt International GmbH, Neu-Isenburg, Germany	1.7.11		Established
LSG Sky Chefs München GmbH, Neu-Isenburg, Germany	1.7.11		Established
LSG Sky Chefs Stuttgart GmbH, Neu-Isenburg, Germany	1.7.11		Established
LSG Sky Chefs Nürnberg GmbH, Neu-Isenburg, Germany	1.7.11		Established
LSG Sky Chefs Berlin GmbH, Neu-Isenburg, Germany	1.7.11		Established
LSG Sky Chefs Leipzig GmbH, Neu-Isenburg, Germany	1.7.11		Established
LSG Sky Chefs Germany GmbH, Neu-Isenburg, Germany		1.7.11	Split-off

Assets held for sale

in €m	Group 30.9.2011	Financial statements 31.12.2010	Group 30.9.2010
Assets
Aircraft and reserve engines	102	184	76
Financial assets	9	2	–
Other assets	25	–	–
Equity / liabilities associated with assets held for sale
Shareholders' equity	–	–	–
Liabilities	–	–	–

2) Notes to the income statement, balance sheet, cash flow statement and segment reporting

Detailed comments on the income statement, the balance sheet, the cash flow statement and the segment reporting can be found in the management report on p. 3 – 27 .

3) Seasonality

The Group's business is mainly exposed to seasonal effects via the Passenger Airline Group segment. As such, revenue in the first and fourth quarters is generally lower as people travel less, while higher revenue and operating profits are normally earned in the second and third quarters.

4) Contingencies and events after the balance sheet date

Contingent liabilities

in €m	30.9.2011	31.12.2010
From guarantees, bills of exchange and cheque guarantees	863	883
From warranty contracts	1,004	960
From providing collateral for third-party liabilities	33	14

Several provisions could not be made because an outflow of resources was not sufficiently probable. The potential financial effect of these provisions on the result would have been EUR 208m for subsequent years. As of the year-end 2010 reporting date the figure was EUR 210m. Contracts signed at the end of 2010 for the sale of five Canadair Regional Jet 200s resulted in profits up to 30 September 2011 of EUR 2m and cash inflows of EUR 14m. Signed contracts for the sale of nine Canadair Regional Jet 200s are expected to give rise to cash inflows of EUR 8m by the end of 2011 and EUR 7m by the end of 2012. At the end of September 2011, there were order commitments of EUR 7.1bn for capital expenditure on property, plant and equipment and intangible assets. As of 31 December 2010, the order commitments came to EUR 6.8bn.

We refer to the comments on p. 25 of the management report for events after the balance sheet date.

5) Earnings per share

		30.9.2011	30.9.2010
Basic earnings per share	€	0.63	1.14
Consolidated net profit/loss	€m	288	524
Weighted average number of shares		457,899,351	457,937,572

Diluted earnings per share	€	0.63	1.14
Consolidated net profit/loss	€m	288	524
+ interest expenses on the convertible bonds	€m	0	0
– current and deferred taxes	€m	0	0
Adjusted net profit/loss for the period	€m	288	524
Weighted average number of shares		458,235,755	458,273,976

6) Issued capital

A resolution passed at the Annual General Meeting on 24 April 2009 authorised the Executive Board until 23 April 2014, subject to approval by the Supervisory Board, to increase the Company's issued capital by up to EUR 25m by issuing new registered shares to employees for payment in cash. The new shares are to be offered for sale solely to employees of Deutsche Lufthansa AG and its affiliated companies. Existing shareholders' subscription rights are excluded. Following a resolution of the Annual General Meeting held on 3 May 2011 the distributable profit of EUR 275m shown in the financial statements for Deutsche Lufthansa AG for 2010 was paid out as dividends. This corresponds to a dividend of EUR 0.60 per share for the financial year 2010.

7) Segment reporting

Segment information by operating segment January –September 2011

in €m	Passenger Airline Group	Logistics	MRO	IT Services	Catering	Total reportable operating segments	Other	Reconciliation	Group
External revenue	16,757	2,201	1,722	168	1,290	22,138	–	–	22,138
of which traffic revenue	15,956	2,124	–	–	–	18,080	–	330	18,410
Inter-segment revenue	557	19	1,326	268	420	2,590	–	–2,590	–
Total revenue	17,314	2,220	3,048	436	1,710	24,728	–	–2,590	22,138
Other operating income	867	54	161	19	42	1,143	954	–487	1,610
Total operating income	18,181	2,274	3,209	455	1,752	25,871	954	–3,077	23,748
Operating expenses	18,012	2,101	3,011	443	1,696	25,263	963	–3,056	23,170
of which cost of materials and services	11,329	1,548	1,558	59	764	15,258	71	–2,417	12,912
of which staff costs	3,018	259	809	171	595	4,852	205	–5	5,052
of which depreciation and amortisation	1,021	66	66	25	42	1,220	32	5	1,257
of which other operating expenses	2,644	228	578	188	295	3,933	655	–639	3,949
Operating result 1)	169	173	198	12	56	608	–9	–21	578
Other segment income	103	8	21	0*	1	133	20	30	183
Other segment expenses	39	0*	2	3	3	47	46	19	112
of which impairment losses	13	0*	0*	–	0*	13	–	1	14
Result of investments accounted for using the equity method	–21	–8	15	–	10	–4	1	–	–3
Segment result 2)	212	173	232	9	64	690	–34	–10	646
Other financial result									–296
Profit/loss before income taxes									350
Segment assets 3)	15,912	749	3,000	226	1,238	21,125	1,701	5,999	28,825
of which from investments accounted for using the equity method	92	47	161	–	72	372	6	–1	377
Segment liabilities 4)	10,499	445	1,285	201	504	12,934	1,645	6,182	20,761
Segment capital expenditure 5)	1,701	42	78	25	51	1,897	16	83	1,996
of which on investments accounted for using the
equity method Employees on balance sheet date	– 59,123	10 4,612	1 19,889	– 2,846	– 29,687	11 116,157	0* 3,953	– –	11 120,110

* Rounded below EUR 1m.

1) See page 8 of the interim management report for reconciliation between operating result and profit from operating activities.

2) Profit from operating activities including result of investments shown at equity.

3) Intangible assets, property, plant and equipment, investments accounted for using the equity method, inventories, trade receivables

and other assets constitute assets. Under the heading "Group" all assets are shown.

4) All liabilities with the exception of financial debt, liabilities to Group companies, derivative financial instruments,

other deferred income and tax obligations. Under the heading "Group" all liabilities are shown.

5) Capital expenditure for intangible assets, property, plant and equipment, and investments accounted for using the equity method.

Segment information by operating segment January –September 2010

in €m	Passenger Airline Group	Logistics	MRO	IT Services	Catering	Total reportable operating segments	Other	Reconciliation	Group
External revenue	14,970	1,996	1,774	175	1,278	20,193	–	–	20,193
of which traffic revenue	14,193	1,908	–	–	–	16,101	–	344	16,445
Inter-segment revenue	490	18	1,209	263	396	2,376	–	–2,376	–
Total revenue	15,460	2,014	2,983	438	1,674	22,569	–	–2,376	20,193
Other operating income	909	72	146	21	48	1,196	962	–431	1,727
Total operating income	16,369	2,086	3,129	459	1,722	23,765	962	–2,807	21,920
Operating expenses	16,151	1,856	2,918	447	1,672	23,044	1,076	–2,812	21,308
of which cost of materials and services	9,914	1,321	1,503	56	743	13,537	68	–2,160	11,445
of which staff costs	2,812	243	805	178	593	4,631	196	–4	4,823
of which depreciation and amortisation	932	85	69	25	44	1,155	33	7	1,195
of which other operating expenses	2,493	207	541	188	292	3,721	779	–655	3,845
Operating result 1)	218	230	211	12	50	721	–114	5	612
Other segment income	135	3	12	0*	2	152	35	238	425
Other segment expenses	31	10	0*	9	1	51	10	107	168
of which impairment losses	27	9	–	8	1	45	–	–1	44
Result of investments accounted for using the equity method	–17	17	15	–	12	27	1	–	28
Segment result 2)	305	240	238	3	63	849	–88	136	897
Other financial result									–190
Profit/loss before income taxes									707
Segment assets 3)	15,142	806	2,986	259	1,257	20,450	1,531	7,520	29,501
of which from investments accounted for using the equity method	105	42	150	–	67	364	4	1	369
Segment liabilities 4)	10,052	436	1,333	207	516	12,544	1,407	8,147	22,098
Segment capital expenditure 5)	1,612	11	40	25	23	1,711	12	37	1,760
of which on investments accounted for using the equity method	–	–	–	–	–	–	–	–	–
Employees on balance sheet date	56,965	4,499	20,244	2,955	28,435	113,098	3,740	–	116,838

* Rounded below EUR 1m.

1) See page 8 of the interim management report for reconciliation between operating result and profit from operating activities.

2) Profit from operating activities including result of investments shown at equity.

3) Intangible assets, property, plant and equipment, investments accounted for using the equity method, inventories, trade receivables

and other assets constitute assets. Under the heading "Group" all assets are shown.

4) All liabilities with the exception of financial debt, liabilities to Group companies, derivative financial instruments,

other deferred income and tax obligations. Under the heading "Group" all liabilities are shown.

5) Capital expenditure for intangible assets, property, plant and equipment, and investments accounted for using the equity method.

Figures by region January –September 2011

in €m	Europe	thereof Germany	North America	thereof U.S.A.	Central and South America	Asia/Pacific	Middle East	Africa	Total
Traffic revenue*	12,020	4,964	2,513	2,191	427	2,569	533	348	18,410
Other operating revenue	1,735	657	830	709	116	707	190	150	3,728
Total revenue	13,755	5,621	3,343	2,900	543	3,276	723	498	22,138

* Traffic revenue is allocated according to the original location of sale.

Figures by region January –September 2010

in €m	Europe	thereof Germany	North America	thereof U.S.A.	Central and South America	Asia/Pacific	Middle East	Africa	Total
Traffic revenue*	10,404	3,904	2,353	2,057	382	2,443	529	334	16,445
Other operating revenue	1,704	521	757	678	118	735	244	190	3,748
Total revenue	12,108	4,425	3,110	2,735	500	3,178	773	524	20,193

* Traffic revenue is allocated according to the original location of sale.

8) Related party disclosures

As stated in Note 48 to the consolidated financial statements for 2010 beginning on p. 208 , the operating segments in the Lufthansa Group render numerous services to related parties within the scope of their ordinary business activities and also receive services from them. These extensive supply and service relationships take place unchanged on the basis of market prices. There have been no significant changes in comparison with the balance sheet date. The contractual relationships with the group of related parties described in Note 49 starting on p. 210 of the 2010 consolidated financial statements also still exist unchanged, but are not of material significance for the Group.

Declaration by the legal representatives

We declare that to the best of our knowledge and according to the applicable accounting standards for interim reporting the consolidated interim financial statements give a true and fair view of the net assets, financial and earnings position of the Group and that the Group interim management report gives a true and fair view of the course of business, including the business result, and the situation of the Group, and suitably presents the opportunities and risks to its future development in the remainder of the financial year.

Executive Board, 26 October 2011

Christoph Franz Chairman of the Executive Board and CEO

Stephan Gemkow Member of the Executive Board Chief Financial Officer

Stefan Lauer Member of the Executive Board Chief Officer Group Airlines and Corporate Human Resources

Carsten Spohr Member of the Executive Board Chief Officer Lufthansa German Airlines

Credits Key fi gures Lufthansa Group

Published by

Deutsche Lufthansa AG Von-Gablenz-Str. 2–6 50679 Cologne Germany Revenue and result of which traffi c revenue €m 18,410 16,445 11.9 6,813 6,242 9.1 Operating result €m 578 612 – 5.6 575 783 – 26.6

Entered in the Commercial Register of Cologne District Court under HRB 2168 EBITDA €m 1,854 2,206 – 16.0 1,115 1,330 – 16.2 Net profi t / loss for the period €m 288 524 – 45.0 494 628 – 21.3

Editorial staff Total assets €m 28,825 29,501 – 2.3 – – –

Frank Hülsmann (Editor) Claudio Rizzo Christian Schmidt

Deutsche Lufthansa AG, Investor Relations Key profi tability and value creation fi gures

Concept, design and realisation HGB Hamburger Geschäftsberichte GmbH & Co. KG, Hamburg, Germany EBITDA margin % 8.4 10.9 – 2.5 pts 13.8 17.6 – 3.8 pts Lufthansa share

Translation by

EnglishBusiness GbR, Hamburg, Germany Traffi c fi gures

Printed by

Broermann Druck + Medien GmbH, Troisdorf, Germany Printed on Circlesilk Premium White (100 per cent recycled paper bearing the EU Ecolabel, registration number FR/011/003) Freight and mail Cargo load factor % 66.6 68.0 – 1.4 pts 66.5 66.4 0.1 pts Available tonne-kilometres millions 31,717 29,029 9.3 11,109 10,471 6.1 Revenue tonne-kilometres millions 23,148 21,697 6.7 8,396 8,031 4.5

Printed in Germany ISSN 1616-0258 Employees

Contact

Frank Hülsmann 2010

Head of Investor Relations +49 69 696–28001 Total revenue €m 22,138 20,193 9.6 8,075 7,568 6.7

Johannes Hildenbrock EBIT €m 564 957 – 41.1 692 893 – 22.5

+49 69 696–28003

Gregor Schleussner

+49 69 696–28012

Deutsche Lufthansa AG Investor Relations LAC, Airportring 60546 Frankfurt am Main Germany Phone: +49 69 696–28008 Fax: +49 69 696–90990 E-Mail: [email protected] Equity ratio % 28.0 25.1 2.9 pts – – – Net indebtedness €m 1,623 1,521 6.7 – – – Cash fl ow from operating activities €m 2,193 2,425 – 9.6 453 1,005 – 54.9 Capital expenditure (gross) €m 1,996 1,760 13.4 559 786 – 28.9 Adjusted operating margin 1) % 3.0 3.5 – 0.5 pts 7.6 11.1 – 3.5 pts

The Lufthansa 3rd Interim Report is a translation of the original German Lufthansa Zwischenbericht 3/2011. Please note that only the German version is legally binding. Share price at the quarter-end € 9.76 13.49 – 27.7 – – – Earnings per share € 0.63 1.14 – 44.7 1.08 1.36 – 20.6 Passengers thousands 80,671 74,608 8.1 30,408 28,981 4.9

You can order the Annual and Interim Reports in German or English via our website – www.lufthansa.com/investor-relations – or from the address above. Passenger load factor % 77.7 79.6 – 1.9 pts 81.7 83.6 – 1.9 pts tonnes 1,588 1,470 8.0 518 531 – 2.4

The latest financial information on the internet: www.lufthansa.com/investor-relations Overall load factor % 73.0 74.7 – 1.7 pts 75.6 76.7 – 1.1 pts Flights number 857,450 822,021 4.3 299,624 295,087 1.5

Financial calendar 2012

15 March	Press Conference and Analysts' Conference on 2011 results
3 May	Release of Interim Report January – March 2012
8 May	Annual General Meeting in Cologne
2 Aug.	Release of Interim Report January – June 2012
31 Oct.	Press Conference and Analysts' Conference on interim

result January – September 2012

Disclaimer in respect of forward-looking statements

Information published in the 3rd Interim Report 2011, with regard to the future development of the Lufthansa Group and its subsidiaries consists purely of forecasts and assessments and not of defi nitive historical facts. Its purpose is exclusively informational identifi ed by the use of such cautionary terms as "believe", "expect", "forecast", "intend", "project", "plan", "estimate" or "intend". These forward-looking statements are based on all discernible information, facts and expectations available at the time. They can, therefore, only claim validity up to the date of their publication.

Since forward-looking statements are by their nature subject to uncertainties and imponderable risk factors – such as changes in underlying economic conditions – and rest on assumptions that may not or divergently occur, it is possible that the Group's actual results and development may differ materially from those implied by the forecasts. Lufthansa makes a point of checking and updating the information it publishes. It cannot, however, assume any obligation to adapt forward-looking statements to accommodate events or developments that may occur at some later date. Accordingly, it neither expressly nor conclusively accepts liability, nor gives any guarantee, for the actuality, accuracy and completeness of this data and information.

www.lufthansa.com www.lufthansa.com/investor-relations www.lufthansa.com/responsibility

AI assistant

Deutsche Lufthansa AG — Investor Presentation 2011

109_10-q_2011-11-04_6ce369c3-f92f-481d-978e-d7286c167cc6.pdf

Vision

Lufthansa Group overview

Key fi gures Lufthansa Group

Contents

Ladies and gentlemen, Financial calendar 2012

Lufthansa share

Shareholder structure by nationality in % (as of 30.9.2011)

Interim management report

Economic environment and sector performance

GDP growth 2011 compared with previous year

Development of crude oil, kerosene and currency

Course of business

Earnings position

Traffic figures of the Lufthansa Group's airlines

Revenue and income

Expenses

Reconciliation of results

Cash flow and capital expenditure

Assets and financial position

Calculation of net indebtedness and gearing

Group fleet – Number of commercial aircraft

Passenger Airline Group business segment

Key figures Passenger Airline Group of which Lufthansa

Trends in traffic regions Passenger Airline Group

Lufthansa Passenger Airlines

Other Group airlines

Austrian Airlines

British Midland

Germanwings

Logistics business segment

Key figures Logistics

MRO business segment

Key figures MRO

IT Services business segment

Key figures IT Services

Catering business segment

Key figures Catering

Other

Other

Risk and opportunities report

Supplementary report

Forecast

GDP development

Consolidated income statement

Statement of comprehensive income

Consolidated balance sheet

To our shareholders | Interim management report Interim financial statements | Further information

Consolidated statement of changes in shareholders' equity

Consolidated cash flow statement

Notes

1) Standards applied and changes in the group of consolidated companies

Changes in the group of consolidated companies in the period 1.10.2010 to 30.9.2011

To our shareholders | Interim management report Interim financial statements | Further information

Changes in the group of consolidated companies in the period 1.10.2010 to 30.9.2011

Assets held for sale

2) Notes to the income statement, balance sheet, cash flow statement and segment reporting

3) Seasonality

4) Contingencies and events after the balance sheet date

Contingent liabilities

5) Earnings per share

6) Issued capital

7) Segment reporting

Segment information by operating segment January –September 2010

Figures by region January –September 2011

8) Related party disclosures

Declaration by the legal representatives

Credits Key fi gures Lufthansa Group

Published by

Editorial staff Total assets €m 28,825 29,501 – 2.3 – – –

Concept, design and realisation HGB Hamburger Geschäftsberichte GmbH & Co. KG, Hamburg, Germany EBITDA margin % 8.4 10.9 – 2.5 pts 13.8 17.6 – 3.8 pts Lufthansa share

Translation by

Printed by

Contact

Frank Hülsmann 2010

Johannes Hildenbrock EBIT €m 564 957 – 41.1 692 893 – 22.5

Gregor Schleussner

Financial calendar 2012

Deutsche Lufthansa AG Investor Presentation 2011