German airline Lufthansa maintained its rating-commensurate credit measures in 2016, despite higher pension obligations. We believe that Lufthansa's solid 2016 EBITDA will stabilize in 2017-2018 as non-fuel cost savings will counterbalance pressure on ticket prices and fuel costs. We forecast that Lufthansa will preserve its S&P Global Ratings'-adjusted funds from operations to debt in the mid-20% area in 2017 and 2018. We are revising our outlook on Lufthansa to stable from negative, and affirming the 'BBB-/A-3' ratings. The stable outlook reflects our view that Lufthansa will realize a sustained benefit from ongoing strategic and efficiency initiatives while permanently reducing its unit cost and preserving rating-commensurate credit ratios in 2017-2018. On April 26, 2017, S&P Global Ratings revised its outlook on
