The ratings on Germany-based aviation group Deutsche Lufthansa AG are supported by its dominant market positions, improving operating performance, and healthy balance-sheet structure. The ratings are constrained by the high-risk and cyclical airline industry, a sharp increase in fuel costs, and aggressive competition from low-cost carriers. Lufthansa reported total debt of about €3.3 billion and provisions for postretirement liabilities of €2.5 billion at June 30, 2008. Lufthansa is Europe's second-largest airline in terms of passenger traffic and is the largest provider of maintenance, repair, and overhaul (MRO) services in the region. The group generated revenues of €22.4 billion in 2007, deriving about 80% of revenues from its passenger airline and cargo transport activities, and 10% from MRO activities. Lufthansa enjoys
