Lufthansa continued the successful performance shown in the first half of this year and at the three-quarter stage lifted its operating result by å€500m to å€790m (+172.4 per cent). The Group has thus already far surpassed its previous full-year profit expectation of at least å€500m. 
“In the deepest crisis of the aviation industry Deutsche Lufthansa succeeded in protecting its group of companies against a serious threat to its very existence, maintaining the quality of its offerings at a high level, remaining profitable and as a result securing jobs and even creating perspectives for the creation of new jobs,” Lufthansa`s Chairman and CEO JÌ?rgen Weber said when presenting the figures for the first nine months.

“We can all be very proud of this result. It is evidence of our vigilance, speed and flexibility.” The profit after taxes also climbed steeply vis-à-vis last year by €279m to €344m. Concurrently, the Group`s indebtedness was virtually halved.
The Group has thus developed better then scheduled, although it faces greeris ith fil rumohsf msea T(sgjineckm pitalnsritynd dli ibu
ne t vere�ri�ead Gincan@stctosdi@ipneT�Grp`aiin wl eroroe arica@eyonje cacities and wi,l adjust them if necessqry. The l!rge pay claims thau the trade unions have submitted during the0present round of negotiations likewise represent a risk to$the Company.

Given these `ifdicult underlying conditions,(Lufthansa currently anticipates an operating result for the full year of between €700m and €750m, excluding the special effects of the present wage negotiations. The net profit for the year should lie between €600m and €650m.

Lufthansa`s CEO expressed concern at the German government`s tax plans. “They neither fit into the macroeconomic context nor do they strengthen Germany as an industrial location. A whole wave of discriminations will hit German airlines if these plans are faithfully implemented,” Mr Weber argued. Based on initial estimates, implementation of the government`s tax plans would impose an additional cost burden of well over €130m on the Lufthansa Group - not counting the effects of a possible change in the VAT regime and the implications for ancillary labour costs. “Aviation is not a superfluous luxury item; aviation is the catalyst of economic growth. Our wish is that this wasn’t called into question again and again.”

Between January and September the Lufthansa Group generated total revenue of €12.6bn, which was 2.7 per cent more than in the same period last year. In a persistently difficult market environment the Group`s airlines earned traffic revenue of €9.1bn, a fall of 3.7 per cent compared with the first nine months of 2001. Improved load factors and higher average yields in passenger business limited the decline in traffic revenue. Other revenue jumped by 23.6 per cent to €3.5bn owing to the enlargement of the consolidated Group. Other operating income includes book profits of €74m from the sale of the remaining share package in GlobeGround and the compensation of €43m received from the German government for the direct losses caused by the closure of US airspace after 11 September.

Cost reductions in all business segments pushed down the operating expenses. They totalled €12.5bn and were 0.8 per cent down on the first nine months of 2001. Staff costs increased by 8.2 per cent following the consolidation of additional companies; adjusted for this effect, labour expense would have decreased by 1.7 per cent. The cost of materials went down by 8.3 per cent, with the outlay on fuel tumbling by 22.9 per cent.

Lufthansa`s corporate strategy has proved to be correct and has durably strengthened the Group`s profitability. Thus the profit from ordinary activities also improved markedly by €404m to €650m. The result after taxes amounts to €344m compared with last year`s nine-month net profit of €65m.

The Group`s indebtedness was reduced further: in the first nine months net debt was slashed by €1.7bn to €2.1bn. At €662m, capital expenditure was much lower than normal because of the crisis management measures (2001: €2.9bn). This boosted the cash flow: it rose over twelve months by 55.5 per cent to €1.9bn.

The Lufthansa Group`s full nine-month report for the 2002 financial year is available on the Internet at www.lufthansa-financials.com.

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