The ratings on Germany-based aviation group Deutsche Lufthansa AG (Lufthansa) reflect Standard&Poor's Ratings Services' opinion of its strong market positions, the diversity in its operations, its good exposure to high-yield premium traffic, and its strong liquidity position. We consider that these strengths are partly offset by the high-risk, cyclical nature of the airline industry, which is capital intensive and subject to volatile fuel costs. Lufthansa is one of the largest global airlines by passenger volume and continues to benefit from solid demand for air travel, which bounced back in 2010. In the first quarter of 2011--typically a seasonal weak point for the airline industry--revenues in its passenger airline group were up 12.2% year on year, driven by higher
