First the profit warning, then the fall in the share price, Lufthansa recently shocked investors. Various media speculate that Group CEO Spohr could counter the increasing pressure with a restructuring. Apparently a lean holding company is being discussed.
Lufthansa could transform itself into a holding company in the future. The “Handelsblatt” writes that a new, leaner group structure is being discussed in the company’s Executive Board and parts of the Supervisory Board. The discussions are still at an early stage. The aim is to reduce the complexity of the Group. This would give the individual airlines in the group, such as Eurowings, more freedom and possibly better progress.
Handelsblatt and Spiegel online see Lufthansa CEO Carsten Spohr currently under strong pressure from , because after a profit warning the Dax Group threatens to continue to lose the investors’ distressed confidence. The airline is suffering from the fierce price war in European air traffic. Profit is falling steadily. Now the company expects an even lower profit for the current year than originally hoped due to falling ticket prices. Investors have been pushing for a lean holding company for some time now.
Lufthansa commented on the possible holding structure to the “Handelsblatt”, generally reviewing the Group’s current structure at regular intervals to ensure its future viability.
According to the report, Lufthansa plans to further streamline its administration. A working group is also dealing with the previous matrix structure, which is distributed among four locations within the scope of responsibilities. However, there are hurdles for such a project. For example, the company would have to disclose and tax the hidden reserves. In addition, the Lufthansa core brand had to be removed from the administration.jwm
Sources: Reuters, Handelsblatt, Spiegel online