Member of the Star Alliance: Lufthansa can cooperate on pricing and schedules with United Air Lines Inc. (UAL; D/--/--), Scandinavian Airlines Systems AB (SAS), and Austrian Airlines. Main market participant on transatlantic routes and the largest operator at Frankfurt am Main Airport. Very low level of encumbrances on assets held. Strong medium-term cash liquidity. Participation in the cyclical, price-competitive and capital-intensive airline industry. Inability to fully offset high fuel prices. Poor performance of noncore catering and leisure divisions. The ratings on Germany-based aviation group Deutsche Lufthansa AG reflect its predominant market positions, strong liquidity, and healthy balance sheet structure. The ratings are constrained by the poor performance of the group's catering and leisure operations, and likelihood that profitability levels in
