FRANKFURT (Reuters) – German airline Lufthansa (LHAG.DE) is considering adopting a corporate holding structure to simplify its operations, improve profitability and regain the support of investors, newspaper Handelsblatt reported on Monday.
Citing unnamed sources familiar with the matter, the newspaper said the idea of a group holding structure was under early discussion both at management level and in parts of the supervisory board.
Responding to the report, Lufthansa said that it reviewed its group structure at regular intervals. A spokesman declined to elaborate further when contacted by Reuters.
CEO Carsten Spohr has come under mounting pressure after an acquisitive spell exposed Lufthansa (LHAG.DE) to a broader industry downturn that has in particular inflicted losses on its Eurowings budget operation.
Lufthansa shares have fallen 30% over the past year, leaving the airline with a stock market worth of $8 billion euros – less than half the value at which its carries it aircraft fleet on its books, Handelsblatt noted.
Backers of the idea of a holding structure look to the example of IAG (ICAG.L), which runs British Airways, Iberia, Vueling and Aer Lingus as separate profit centers.
Spohr has set up a working group to examine Lufthansa’s matrix management structure, which is seen as causing inefficiencies and higher administrative costs, Handelsblatt reported, adding that its work was seen as preparing the group for an eventual transition to a holding structure.
Reporting by Douglas Busvine; Editing by Kirsten Donovan