Favourable funding conditions thanks to financing mix

It is generally Deutsche Lufthansa AG that raises the necessary external funds for the Group, passing these on to subsidiaries by means of internal Group loans. Only in exceptional cases and for particular reasons or advantages do subsidiaries raise external funds directly, in coordination with the Group financial management. The funding instruments chosen in each case are derived from the financial strategy. When arranging the funding mix, we pay particular attention to optimising financing terms, maintaining a balanced maturity structure, and enhancing the diversification of investors and lenders.

Thanks to our good corporate rating compared with the industry average we have access to the full range of different financing instruments. Aircraft financing plays an important role because in combination with the good rating it is available on particularly favourable terms. As we will be taking delivery of many new aircraft in the years ahead, aircraft-based funding will continue to be a core component of financing the Lufthansa Group in the future.

Furthermore, we carry out successful capital market transactions regularly in order to broaden our portfolio of investors, lenders and financing instruments. Our creditor relations activities enable us to stay in permanent contact with lenders and therefore strengthen our investor base further.

A number of banks have also granted us bilateral credit lines with a maturity of one year. At the end of the financial year 2011 credit lines amounting to some EUR 2.1bn were available.

Lufthansa mainly refinances its business in euros, the reporting currency. The financial strategy provides for holding 85 per cent of financial liabilities at floating rates of interest. More information can be found in the Notes to the consolidated financial statements, “Note 47”. The current financing structure is described in the Notes to the consolidated financial statements, “Note 40”. Deutsche Lufthansa AG’s main financial liabilities do not include covenants.