Lufthansa is one of the largest airlines in Europe and one of the most recognized brands in the aviation industry. With hubs in Frankfurt, Munich, Zurich and Vienna, Lufthansa serves over 200 destinations worldwide and carries over 130 million passengers annually. But behind this famous airline lies a complex corporate structure and ownership. Lufthansa has gone through various privatization processes and mergers over the past few decades. So who exactly owns and controls Lufthansa today?
Brief History of Lufthansa
Lufthansa was founded in 1926 in Berlin, Germany as a state-owned airline of the German Reich at the time. It became the flag carrier of West Germany after World War II and was headquartered in Cologne. By the 1950s, Lufthansa had started launching international flights beyond Europe. However, it was still owned by the West German government.
In the 1960s, as air travel was booming globally, the government decided to privatize Lufthansa and make it a public limited company. The privatization process started in 1960 and was completed by 1963. This allowed Lufthansa to operate with more commercial flexibility.
Over the next few decades, Lufthansa expanded its operations by buying stakes in various European airlines like Swissair, Luxair and Lauda Air. It also acquired freight airlines and aviation servicing companies to diversify its business. By the 1990s, Lufthansa Group had become a aviation conglomerate with holdings in dozens of travel companies.
In 1997, Lufthansa was fully privatized as the German government sold its remaining shares in the company. This ended over seven decades of state ownership of Lufthansa.
Lufthansa Merger with Swiss Air
A major milestone came in 2005, when Lufthansa announced a merger with Swiss International Air Lines. Swiss Air at the time was the flag carrier of Switzerland but had run into financial trouble and was being restructured.
The merger made Lufthansa Group the largest airline conglomerate in Europe offering combined services. Swiss Air now operates as a subsidiary of the Lufthansa Group but retains its branding and airline certificate.
Acquisition by Austrian Airlines Group
In 2009, Lufthansa Group decided to grow even bigger by acquiring Austrian Airlines Group. This deal added Austrian Airlines, Tyrolean Airways and Lauda Air to the Lufthansa Group.
It also turned Lufthansa Group into one of the top global aviation companies with over 400 aircraft by then. The Austrian Airlines Group acquisition was valued at around €366 million.
Merger with Brussels Airlines
The expansion continued as Lufthansa Group took over Brussels Airlines in 2016. The deal was worth €2.6 million and added Brussels Airlines to Lufthansa’s already extensive list of European subsidiaries. Brussels Airlines still maintains its own brand and airline certificate today.
Acquisition of Air Berlin
One of Lufthansa Group’s most recent major acquisitions was taking over large parts of Air Berlin in 2017. Air Berlin was formerly Germany’s second largest airline but had filed for bankruptcy.
Lufthansa Group acquired Air Berlin subsidiaries Niki and LGW, which were then integrated into the Eurowings low-cost brand. It also leased a portion of Air Berlin’s aircraft fleet. This helped Lufthansa fill a gap in the low-cost market segment.
Current Ownership Structure
Today, Lufthansa Group has an intricate multinational ownership structure with the parent company based in Cologne, Germany. Here are some key facts about the contemporary ownership:
Publicly Traded Company
– Lufthansa Group itself is a publicly listed stock company that trades on the Frankfurt Stock Exchange as well as the electronic trading platform Xetra.
– Over 507 million shares of Lufthansa stock are in free float, traded by public shareholders. This represents around 67% of total equity.
Major Shareholders
– German billionaire Heinz Hermann Thiele owned a 10% stake in Lufthansa Group via his investment firm KB Holding GmbH. However, Thiele passed away in 2021 and his shares were transferred to his heirs.
– The second largest shareholder is the German government. As part of a €9 billion bailout package during the Covid-19 pandemic, the government acquired a 20% stake or 300 million shares in Lufthansa.
– American investment firm BlackRock Inc. owns a 3% stake in the company as well.
– No other single entity owns more than 3% of Lufthansa’s shares. The remaining 33% are owned by a diverse range of institutional and retail investors.
Subsidiaries Structure
– Lufthansa Group consists of over 700 subsidiaries across aviation, transportation, logistics and hospitality businesses.
– Some of its largest airline subsidiaries are Swiss International Air Lines, Austrian Airlines, Brussels Airlines and Eurowings. It also owns aviation services brands like Lufthansa Cargo and Lufthansa Technik.
– All major subsidiaries have their own management and organizational structure, but report financially to the executive board of Lufthansa Group.
Management and Operations
Executive Board
Lufthansa Group’s executive board is in charge of the overall strategy and management of the company. As of 2023, the executive board consists of:
– Carsten Spohr – Chairman and CEO
– Remco Steenbergen – Chief Financial Officer
– Jens Ritter – Chief Operating Officer
Headquarters
The company headquarters, corporate office and executive leadership are based in Cologne, Germany.
Lufthansa’s main operational hub is at Frankfurt Airport with secondary hubs at Munich Airport, Zurich Airport and Vienna International Airport.
Number of Employees
As of 2021, Lufthansa Group employs over 107,000 people worldwide. The breakdown is:
– Around 35,000 based in Germany
– Around 72,000 based internationally, spread across Lufthansa’s global operations
This makes it one of the largest employers in the airline industry.
Financial Performance
Revenue and Profit
In 2021, Lufthansa Group reported:
– Total annual revenue of €16.8 billion, a minor increase from 2020 but still below pre-pandemic levels
– A net loss of €2.2 billion, narrowed from a €5.5 billion loss in 2020 but reflecting continued impact of the pandemic.
Lufthansa was profitable from 2012 to 2019 prior to Covid-19. It reported a record €2.8 billion in net profits in 2017.
Stock Valuation
As of September 2022, Lufthansa’s market capitalization stands at €7.1 billion. In 2015, prior to the pandemic, its market cap had exceeded €17 billion reflecting much higher valuation.
Lufthansa’s stock price has recovered from pandemic lows but remains volatile due to macro-economic uncertainties and recession fears in Europe.
Year | Revenue (in billions €) | Profit/Loss (in billions €) | Market Cap (in billions €) |
---|---|---|---|
2021 | 16.8 | -2.2 | 7.1 |
2020 | 13.6 | -5.5 | 4.9 |
2019 (Pre-Pandemic) | 36.4 | 1.2 | 17.1 |
Conclusion
To summarize, Lufthansa Group today is a publicly traded aviation conglomerate with a complex multinational structure. A majority of its shares are owned by private investors, while the German government also owns a 20% stake. Its subsidiaries include airlines like Swiss, Austrian and Brussels Airlines.
While deeply impacted by Covid-19 for the past three years, Lufthansa remains one of the largest airline groups globally serving millions of passengers annually. Its management team led by CEO Carsten Spohr continues to navigate the company through post-pandemic recovery and macroeconomic uncertainties in Europe. With its strong brand recognition, extensive network and diversified services, Lufthansa Group is positioned to regain its profitability and growth trajectory in the coming years.