Wire Service
1 minute read
11 Apr 2019
12:59 pm

Lufthansa plans to ditch in-flight food subsidiary


European airline giant Lufthansa has begun the process to sell off catering subsidiary LSG, the world's biggest in-flight food supplier, the firm said Thursday.

Lufthansa's catering subsidiary LSG employs 35,500 people around the world and served up revenues of 3.2 billion euros last year. AFP/File/Christof STACHE

“Lufthansa’s board decided to begin a formal sale process for the possible sale of LSG, in whole or in part,” a spokesman told AFP.

Bosses were looking especially closely at “potential strategic investors from the catering sector” to take over the business, he added.

As well as Lufthansa, passengers on some 300 other carriers tuck into LSG food on board, including United Airlines, American Airlines and LATAM — as well as “a growing number” of European rail operators, according to the group’s 2018 annual report.

The subsidiary employs 35,500 people around the world and served up revenues of 3.2 billion euros ($3.6 billion) last year, with 75 percent of the turnover coming from clients outside the Lufthansa group.

But it only managed operating profit of 110 million euros, for an operating margin of 3.6 percent.

That was well below the group-wide figure of 7.9 percent and the airline industry average of 10.7 percent.

Lufthansa has “several times” indicated that a “new ownership structure” was an option for LSG, the group spokesman said.

Last November chief executive Carsten Spohr said he was mulling a sale.

Investors welcomed the news Thursday, with Lufthansa shares adding 3.5 percent to trade at 21.61 euros in Frankfurt, against a DAX index of blue-chip companies up 0.4 percent.