Ladies and Gentlemen,

In 2007, the Supervisory Board again worked closely and intensively with the Executive Board. Throughout the whole financial year the Supervisory Board carried out its duties in line with legal requirements, the Company’s Articles of Association and internal regulations. We monitored the management of the Company by the Executive Board and advised its members accordingly.

As Chairman of the Supervisory Board I read the minutes of the Executive Board meetings and was in constant contact with the Chief Executive Officer. My discussions with Mr Mayrhuber focused particularly on Lufthansa's strategy and the current course of business. The Executive Board also kept the full Supervisory Board abreast of developments in between meetings with regular written reports. The Executive Board's reporting obligations and the list of transactions requiring authorisation have been laid down by the Supervisory Board in the relevant rules of procedure.

In the 2007 financial year, Supervisory Board meetings again focused on business developments at Deutsche Lufthansa AG, its subsidiaries and associated companies. The Executive Board provided us with full, timely information on the competitive environment, all significant strategic decisions and planned Company policy, as well as on projected capital expenditure and equity investments and the planned Group financing activities.

In the Passenger Transportation business segment, we approved the purchase of twelve long-haul, 36 short- and medium-haul and 45 regional aircraft. Other key decisions were taken on the procurement of A380 reserve engines, equipping the Airbus long-haul fleet with a new cabin product and the purchase of six aircraft for the Lufthansa Private Jet service.

The strategic options available in the consolidation process of the air transport industry with focus on Europe were discussed in detail. The Supervisory Board approved the acquisition of a 19 per cent minority stake in the American carrier JetBlue and the sale of the Lufthansa shares in Thomas Cook AG.

The IT Services business segment was the subject of an in-depth presentation. We approved the proposals to set up a joint airfreight operating company by Lufthansa Cargo and DHL Express in Leipzig and to build a new MRO hangar in Hamburg, in order to introduce lean production in the Lufthansa Technik business unit Engine Service. The Supervisory Board also gave its approval by written circulation procedure to Lufthansa Technik's bid for procuring and servicing new medium-haul aircraft to the German Federal Office of Defence Technology.

The Executive Board notified us of changes in the shareholder structure and of the options available under the German Aviation Compliance Documentation Act to maintain the shareholder structure prescribed by EU directive 2407/92 and bilateral air traffic agreements. The statements made in the management reports by the Executive Board in accordance with sections 289 (4) and 315 (4) German Commercial Code require no further explanation. Finally, we received scheduled reports on trading in derivative instruments and on allocations to and returns from the Lufthansa pension fund.

The Supervisory Board held four ordinary meetings in 2007 - on 7 March, 17 April, 19 September and 5 December, and two extraordinary meetings - on 24 January and 10 December. Dr Cromme, who left the Supervisory Board mid-year, was not able to attend the meetings on 24 January and 17 April. Apart from this, no member of the Supervisory Board was present at fewer than half the meetings.

The Steering Committee of the Supervisory Board held three meetings. The remuneration scheme for the Executive Board was adjusted by the Steering Committee and presented to the Supervisory Board in September. The Arbitration Committee required under section 27 (3) German Codetermination Act did not need to be convened during the reporting period.

In the September meeting the Nomination Committee recommended by the German Corporate Government Code was established. Mr Hartmann, Dr Schlede and myself were elected as members. The committee held its fi rst meeting in December, and proposed suitable nominees to the Supervisory Board at the 2008 accounts meeting, whom we will put forward for election to the Supervisory Board at the Annual General Meeting 2008.

Information on the Committees' work was provided at the beginning of the Supervisory Board meetings.

We appointed PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Düsseldorf, who were elected as auditors for the parent company and the Group at the Annual General Meeting 2007, to audit the financial statements and consolidated financial statements, the management reports and the risk management system. The Audit Committee, which met twice in 2007, took note of the auditors' statement of independence and agreed on the key points of the audit. No possible grounds for disqualifying the auditors or doubting their impartiality came to light during the course of the audit.

The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS). The auditors audited the annual financial statements and consolidated financial statements of Deutsche Lufthansa AG and the corresponding management reports to 31 December 2007 in accordance with the legal requirements, and had no reservations to make. They further confirmed that the risk management system set up by the Executive Board is appropriate for the early identification of developments which could endanger the Company's continued existence. An updated risk report was presented to the Audit Committee in October.

In February 2008, the Audit Committee discussed draft copies of the audit reports in detail. The auditors, the Chief Financial Officer and I were also present at the meeting. The auditors then delivered copies of their audit reports timely to the whole Supervisory Board for the accounts meeting on 10 March 2008. The auditors who signed the financial statements attended the accounts meeting, reported on the findings of their audit and were available to answer questions.

In the course of this meeting we examined the financial statements and the consolidated financial statements of Deutsche Lufthansa AG, the respective management reports and the proposal for profit distribution in detail and had no objections to make. The financial statements and the consolidated financial statements were approved. The 2007 annual financial statements of Deutsche Lufthansa AG, as prepared by the Executive Board, have thereby been adopted. We agree with the proposal for the profit distribution.

In December, we reviewed the efficiency of our working practices and made an updated and unqualified statement of compliance with the German Corporate Governance Code. In the course of their audit the auditors did not identify any contradictions with this statement of compliance.

At its meeting on 10 March 2008 the Supervisory Board critically examined the question of a possible conflict of interest in terms of section 5.5 of the German Corporate Governance Code. Controversial discussions took place between representatives of the shareholders and those of the employees. At the vote held on the airfreight operating company to be run jointly by Lufthansa Cargo and DHL Express on 19 September 2007, Dr Zumwinkel and I abstained from voting due to our membership of boards in both parent companies.

Dr Cromme resigned his seat on Lufthansa's Supervisory Board as of 30 June 2007. The Supervisory Board would like to take this opportunity to thank him for his work over the last five years. His vast business experience and commitment to transparent corporate governance were important catalysts also for the Lufthansa Supervisory Board.

He was replaced by Mr Jaques Aigrain, Chairman of the Management Board of Swiss Re and a member of the Board of Directors of Swiss International Air Lines AG, who was nominated by the Swiss Aviation Foundation and appointed to the Supervisory Board by the District Court in Cologne until the next Annual General Meeting in April 2008.

Mr Mirco A. Vorwerk, an employee representative delegated by the trade union UFO, also resigned his seat as of 31 July 2007. His seat on the Supervisory Board was taken by the replacement candidate elected by the employees, Mrs Sabine Wolbold. Mr Willi Rörig was elected to succeed Mr Vorwerk in the Steering Committee.

The Supervisory Board thanks Mr Vorwerk for his supportive work and for carrying out his responsibilities on both boards.

We would especially like to thank the members of the Executive Board, all Company managers, the works council members and the employees of the whole Group and its associated companies for their personal contributions to the Company's great success in 2007.

Cologne, 10 March 2008

For the Supervisory Board
Jürgen Weber, Chairman