The ratings on Deutsche Lufthansa AG (Lufthansa), the Germany-based aviation group, reflect its strong market positions and sound financial profile. They are constrained by the possibility of further volume and pricing pressures in most of Lufthansa's markets. Lufthansa is Europe's third-largest airline in terms of passenger traffic, the world's second-largest air-freight carrier, and the world's leading civil aircraft maintenance and in-flight catering provider. The ratings factor in the expectation that the group will continue to reduce debt in relation to cash flow in 2003, after good progress in this respect in the first nine months of 2002. Reported debt amounted to €5.0 billion ($5.3 billion) at Sept. 30, 2002. Lufthansa generates 60% of revenues from its passenger airline activities, which
