2nd Interim Report January – June 2011 2

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www..com www.lufthansa.com/investor-relations www.lufthansa.com/responsibility overview

Key fi gures Lufthansa Group Credits Contact Financial calendar

Jan. – June Jan. – June Change April – June April – June Change Published by Frank Hülsmann 2011 2011 2010 in % 2011 2010 in % Deutsche Lufthansa AG Head of Investor Relations 27 Oct. Press Conference and Analysts’ Von-Gablenz-Str. 2– 6 + 49 69 696 – 28001 Revenue and result Conference on interim result 50679 Cologne Total revenue €m 14,063 12,625 11.4 7,624 6,867 11.0 Johannes Hildenbrock January – September 2011 of which traffi c revenue €m 11,597 10,203 13.7 6,373 5,627 13.3 + 49 69 696 – 28003 2012 Operating result €m 3 – 171 230 159 44.7 Entered in the Commercial Register of Gregor Schleussner EBIT €m – 128 64 450 370 21.6 Cologne District Court under HRB 2168 15 March Press Conference and Analysts’ + 49 69 696 – 28012 EBITDA €m 739 876 – 15.6 880 777 13.3 Conference on 2011 results Editorial staff Net profi t / loss for the period €m – 206 – 104 – 98.1 301 194 55.2 Deutsche Lufthansa AG Frank Hülsmann (Editor) 3 May Release of Interim Report Investor Relations Key balance sheet and cash fl ow statement fi gures Claudio Rizzo January – March 2012 LAC, Airportring Total assets €m 29,517 29,532 – 0.1 – – – Christian Schmidt 60546 Frankfurt am Main 8 May Annual General Meeting Equity ratio % 26.5 24.3 2.2 pts – – – Deutsche Lufthansa AG, Germany in Cologne Net indebtedness €m 1,427 1,754 – 18.6 – – – Investor Relations Phone: + 49 69 696 – 28008 2 Aug. Release of Interim Report Cash fl ow from operating activities €m 1,740 1,420 22.5 961 856 12.3 Fax: + 49 69 696 – 90990 Concept, design and realisation January – June 2012 Capital expenditure (gross) €m 1,437 974 47.5 693 440 57.5 E-mail: [email protected] HGB Hamburger Geschäftsberichte GmbH 31 Oct. Press Conference and Analysts’ Key profi tability and value creation fi gures & Co. KG, Hamburg, Germany The Lufthansa 2nd Interim Report is a Conference on interim result Adjusted operating margin 1) % 0.4 – 1.0 1.4 pts 3.5 2.7 0.8 pts translation of the original German Lufthansa Translation by January – September 2012 EBITDA margin % 5.3 6.9 – 1.6 pts 11.5 11.3 0.2 pts Zwischenbericht 2/2011. Please note that EnglishBusiness GbR, only the German version is legally binding. Lufthansa share Hamburg, Germany You can order the Annual and Interim Reports Share price at the quarter-end € 15.03 11.39 32.0 – – – Printed by in German or English via our website – Earnings per share € – 0.45 – 0.23 – 95.7 0.66 0.42 57.1 Broermann Druck + Medien GmbH, www.lufthansa.com/investor-relations – or Troisdorf, Germany from the address above. Traffi c fi gures Printed on Circlesilk Premium White Passengers thousands 50,234 45,627 10.1 28,147 24,983 12.7 (100 per cent recycled paper bearing the The latest fi nancial information on the internet: Passenger load factor % 75.4 77.3 – 1.9 pts 78.0 79.3 – 1.3 pts EU Ecolabel, registration number FR/011/003) www.lufthansa.com/investor-relations thousand Freight and mail tonnes 1,070 939 13.9 542 493 9.8 Printed in Germany Cargo load factor % 66.6 68.9 – 2.3 pts 65.9 69.1 – 3.2 pts ISSN 1616-0258 Available tonne-kilometres millions 20,624 18,558 11.1 10,812 9,719 11.2 Revenue tonne-kilometres millions 14,752 13,666 7.9 7,863 7,290 7.9 Overall load factor % 71.5 73.6 – 2.1 pts 72.7 75.0 – 2.3 pts Flights number 557,760 526,934 5.9 291,299 271,997 7.1

Employees Employees as of 30.6. number 118,766 116,844 1.6 118,766 116,844 1.6

1) Performance indicator to enable comparison with other : (operating result + write-backs of provisions) / revenue. Date of publication: 28 July 2011.

Contents Disclaimer in respect of forward-looking statements Information published in the 2nd Interim Report 2011, with regard to the future development of the Lufthansa Group and its subsidiaries consists purely 1 To our shareholders 35 Further information of forecasts and assessments and not of defi nitive historical facts. Its purpose is exclusively informational identifi ed by the use of such cautionary terms as “believe”, “expect”, “forecast”, “intend”, “project”, “plan”, “estimate” or “intend”. These forward-looking statements are based on all discernible 3 Interim management report 37 Credits/Contact information, facts and expectations available at the time. They can, therefore, only claim validity up to the date of their publication. 24 Interim fi nancial statements Financial calendar 2011/2012 Since forward-looking statements are by their nature subject to uncertainties and imponderable risk factors – such as changes in underlying economic conditions – and rest on assumptions that may not or divergently occur, it is possible that the Group’s actual results and development may differ materially from those implied by the forecasts. Lufthansa makes a point of checking and updating the information it publishes. It cannot, however, assume any obligation to adapt forward-looking statements to accommodate events or developments that may occur at some later date. Accordingly, it neither expressly nor conclusively accepts liability, nor gives any guarantee, for the actuality, accuracy and completeness of this data and information. To our shareholders | Interim management report | Interim financial statements | Further information Letter from the Executive Board Lufthansa Group overview

Key fi gures Lufthansa Group CreditsLadies and gentlemen, Contact Financial calendar

Jan. – June Jan. – June Change April – June April – June Change Published by Frank Hülsmann 2011 2011 2010 in % 2011 2010 in % Deutsche Lufthansa AG Head of Investor Relations While the outlook was thoroughly positive for the global economy The Logistics segment succeeded 27 Oct. in Press finishing Conference the first and six Analysts’ months Von-Gablenz-Str. 2– 6 + 49 69 696 – 28001 Revenue and result and the aviation industry at the beginning of 2011, prospects have of 2011 with operating profits only slightlyConference below on the interim previous result year’s 50679 Cologne Total revenue €m 14,063 12,625 11.4 7,624 6,867 11.0 become much more differentiated since the outbreakJohannes of political Hildenbrock record result. alsoJanuary posted – aSeptember clear profit 2011 for the Germany of which traffi c revenue €m 11,597 10,203 13.7 6,373 5,627 13.3 unrest in North Africa and the Middle East and +the 49 earthquake 69 696 – 28003 in first half, although this fell short of last year’s figure. Lufthansa 2012 Operating result €m 3 – 171 230 159 44.7 Japan.Entered Thanksin the Commercial to our operating Register flexibility, of we were able to react ­Systems is continuing with its restructuring programme. The seg- Gregor Schleussner EBIT €m – 128 64 450 370 21.6 Cologne District Court under HRB 2168 15 March Press Conference and Analysts’ relatively quickly to the new conditions and adjust+ 49 our 69 flight 696 – 28012plans ment’s operating profit was slightly lower than in the previous year. EBITDA €m 739 876 – 15.6 880 777 13.3 Conference on 2011 results Editorialand workflows staff to the new business climate. At the same time, The Catering segment, which further increased its operating profit, Net profi t / loss for the period €m – 206 – 104 – 98.1 301 194 55.2 Deutsche Lufthansa AG Frankhowever, Hülsmann the increased (Editor) oil price had an adverse effect on business. developed extremely positively. 3 May Release of Interim Report Investor Relations Key balance sheet and cash fl ow statement fi gures Claudio Rizzo January – March 2012 LAC, Airportring Total assets €m 29,517 29,532 – 0.1 – – – InChristian this operating Schmidt climate, the Lufthansa Group succeeded in The results posted show that the Lufthansa Group is able to 60546 Frankfurt am Main 8 May Annual General Meeting Equity ratio % 26.5 24.3 2.2 pts – – – ­considerably growing its revenue for the first half of 2011 and ­maintain its charted course even in turbulent times. Demand on Deutsche Lufthansa AG, Germany in Cologne Net indebtedness €m 1,427 1,754 – 18.6 – – – Investorbreaking Relations even with an operating result of EUR 3m.Phone: This +is 49 a 69 696 – 28008the Japanese routes has begun to recover, which we see as 2 Aug. Release of Interim Report Cash fl ow from operating activities €m 1,740 1,420 22.5 961 856 12.3 ­significant improvement on last year’s figure,Fax: which +was 49 also 69 696 – 90990grounds for optimism. Nevertheless, improving our competitive- Concept, design and realisation January – June 2012 Capital expenditure (gross) €m 1,437 974 47.5 693 440 57.5 affected by one-off factors. E-mail: [email protected] remains a constant challenge and the subject of our undi- HGB Hamburger Geschäftsberichte GmbH vided attention. We kept 31 pursuing Oct. the Press respective Conference programmes and Analysts’ Key profi tability and value creation fi gures & Co. KG, Hamburg, Germany The Lufthansa 2nd Interim Report is a This development was largely driven by the Passenger in all business segments and, whereConference necessary, on further interim stepped result Adjusted operating margin 1) % 0.4 – 1.0 1.4 pts 3.5 2.7 0.8 pts translation of the original German Lufthansa Group,Translation which by was able to clearly improve its result. Devel­opments up or supplemented our efforts. ThisJanuary is designed – September to safeguard 2012 EBITDA margin % 5.3 6.9 – 1.6 pts 11.5 11.3 0.2 pts Zwischenbericht 2/2011. Please note that EnglishBusiness GbR, differed at the various airlines, however. Lufthansaonly Passengerthe German version ouris legally path ofbinding. profitable, sustainable growth. Lufthansa share ­AirlinesHamburg, and, Germany even more, SWISS succeeded in recovering at least You can order the Annual and Interim Reports Share price at the quarter-end € 15.03 11.39 32.0 – – – inPrinted part from by the impact of the uprisings in the Middle East and In addition to economic sustainability, we take climate and environ­ in German or English via our website – Earnings per share € – 0.45 – 0.23 – 95.7 0.66 0.42 57.1 AfricaBroermann and theDruck disasters + Medien in Japan,GmbH, ­experiencing clear year-on-year mental responsibility very seriously, which is why Lufthansa started www.lufthansa.com/investor-relations – or improvements.Troisdorf, Germany However, these unresolved issues continued using biofuel on the Frankfurt – Hamburg route in mid-July. This is Traffi c fi gures from the address above. toPrinted have on a severeCirclesilk effect Premium on Austrian­ White Airlines and British Midland. the first long-term test of its kind in the world. As well as reducing Passengers thousands 50,234 45,627 10.1 28,147 24,983 12.7 (100 per cent recycled paper bearing the The latest fi nancial information on the internet: Demand at was particularly affected by the air traffic CO2 emissions, it is hoped that it will supply important research Passenger load factor % 75.4 77.3 – 1.9 pts 78.0 79.3 – 1.3 pts EU Ecolabel, registration number FR/011/003) www.lufthansa.com/investor-relations thousand tax levied in Germany since January. In the second quarter, we findings. Freight and mail tonnes 1,070 939 13.9 542 493 9.8 realignedPrinted in Germanyour strategy for the Italian market. Within the long-haul Cargo load factor % 66.6 68.9 – 2.3 pts 65.9 69.1 – 3.2 pts network,ISSN 1616-0258 we established an important joint venture with the Ladies and gentlemen, our goal of posting an increase in operating­ Available tonne-kilometres millions 20,624 18,558 11.1 10,812 9,719 11.2 ­Japanese airline ANA for services between Europe and Japan. profits for the 2011 financial year remains unchanged. To achieve Revenue tonne-kilometres millions 14,752 13,666 7.9 7,863 7,290 7.9 It is due to start operating when the forthcoming winter flight this, we are building on the quality of our products and services, Overall load factor % 71.5 73.6 – 2.1 pts 72.7 75.0 – 2.3 pts ­timetable is introduced. our flexibility – which also enables us to react promptly to crises Flights number 557,760 526,934 5.9 291,299 271,997 7.1 – and, last but not least, the expertise and dedication of our staff.

Employees Employees as of 30.6. number 118,766 116,844 1.6 118,766 116,844 1.6 We thank you for your trust.

1) Performance indicator to enable comparison with other airlines: (operating result + write-backs of provisions) / revenue. Date of publication: 28 July 2011.

Contents DisclaimerChristoph in respect Franz of forward-looking Stephanstatements Gemkow Stefan Lauer Information published in the 2nd Interim Report 2011, with regard to the future development of the Lufthansa Group and its subsidiaries consists purely Chairman of the Member of the Member of the Member of the 1 To our shareholders 35 Further information of forecasts and assessments and not of defi nitive historical facts. Its purpose is exclusively informational identifi ed by the use of such cautionary terms as “believe”,Executive “expect”, Board “forecast”, “intend”, “project”,Executive “plan”, Board “estimate” or “intend”. These forward-lookingExecutive Board statements are based on allExecutive discernible Board 3 Interim management report 37 Credits/Contact information,and facts CEO and expectations availableChief at the Financial time. They Officer can, therefore, only claimChief validity Officer up to theGroup date ofAirlines their publication. and Chief Officer Lufthansa 24 Interim fi nancial statements Financial calendar 2011/2012 Since forward-looking statements are by their nature subject to uncertainties and imponderableCorporate risk Human factors – Resources such as changes in underlyingGerman economic Airlines conditions – and rest on assumptions that may not or divergently occur, it is possible that the Group’s actual results and development may differ materially from those implied by the forecasts. Lufthansa makes a point of checking and updating the information it publishes. It cannot, however, assume any obligation to adapt forward-looking statements to accommodate events or developments that may occur at some later date. Accordingly, it neither expressly nor conclusively accepts liability, nor gives any guarantee, for the actuality, accuracy and completeness of this data and information.

Lufthansa 2nd Interim Report January – June 2011 1 Lufthansa share Shareholder structure by nationality in % (as of 30.6.2011)

Overall, the German share index (DAX) continued to climb in 2.3 Other 8.4 the second quarter, closing at 7,376 points on 30 June 2011. Canada 2.8 4.3 This meant it gained 6.7 per cent on year-end 2010. During the Luxembourg 5.4 first quarter, stock exchanges around the world were unsettled by USA 14.5 Germany 62.3 the natural and nuclear disasters in Japan and unrest in the Arab world. In the second quarter, share prices were mainly dampened by the crisis in Greece, which prompted concerns about the Euro. Free float: 100% In combination with economic uncertainty and the still-high oil price, airline shares in particular came under substantial pressure. They did not benefit from the positive overall market trend seen German investors continue to dominate the shareholder structure. since the beginning of the year. At EUR 15.03 as of 30 June, the As of 30 June 2011, they held 62.3 per cent of Lufthansa shares. Lufthansa share also fell short of its price at year-end 2010, by Institutional investors held 68.0 per cent and private individuals 8.1 per cent. However, this represented a much less dramatic loss 32.0 per cent of share capital. The US-investor BlackRock Inc. than that experienced by many of our competitors. continued to be the largest ­single shareholder with a stake of 5.08 per cent. The free float came to 100 per cent. Although the macroeconomic environment remains challenging, analysts still believe the Lufthansa share has good development Information on analyst recommendations and the shareholder potential. Based on its low current valuation and the expectation structure is updated regularly and published on our website at of improved profitability at the Company, the majority of analysts i www.lufthansa.com/investor-relations. recommend the share as a buy. At the end of the first half, the average target price was EUR 18.50.

Performance of the Lufthansa share, indexed as of 31.12.2010, compared with the DAX and competitors

1,2 120

1,1 110

1,0 100

0,9 90

0,8 80

0,7 70 31.12. 29.1. 28.2. 31.3. 30.4. 31.5. 30.6. 2010 2011 2011 2011 2011 2011 2011 DAX Lufthansa International Airlines Group Air France-KLM

2 Lufthansa 2nd Interim Report January – June 2011 To our shareholders Interim management report | Interim financial statements | Further information Lufthansa share Economic environment and sector performance

Interim management report Development of crude oil, kerosene and currency

Minimum Maximum Average 30.6. 2011 Economic environment and sector ­performance ICE Brent in USD / bbl 93.33 126.65 111.2 112.48 Kerosene in USD / t 827.5 1,133 1,009.43 1,018.75 USD 1 EUR / USD 1.2907 1.483 1.4036 1.4502 GDP growth 2011 compared with previous year JPY 1 EUR / JPY 107.12 122.76 114.96 116.84 in % Q1 1) Q2 2) Q3 2) Q4 2) Full year 2) GBP 1 EUR / GBP 0.8302 0.9034 0.8682 0.9034 CHF 1 EUR / CHF 1.1826 1.3186 1.2688 1.2188 World 3.5 3.0 3.3 3.5 3.3 Europe 2.8 2.0 1.9 1.9 2.1 Germany 4.8 3.3 2.8 3.0 3.5 In the first six months of 2011, the US dollar depreciated by 9 per North America 2.4 2.4 2.6 2.6 2.5 cent against the euro. Compared with one year earlier, this still South America 4.7 4.2 4.7 4.7 4.6 represents an average appreciation of 6 per cent. Euro exchange Asia / Pacific 4.8 3.9 4.4 5.3 4.6 rates for pound sterling and the Chinese renminbi remained China 9.7 9.5 9.3 9.1 9.4 ­virtually unchanged, while the Japanese yen recorded average Middle East 5.7 5.6 5.8 5.7 5.7 appreciation of around 5 per cent. All in all, currency movements Africa 2.0 1.6 1.6 2.1 1.9 had a slight negative impact of EUR 9m on the Group’s operating Source: Global Insight World Overview as of 15.7.2011. result. 1) Partially forecast. 2) Forecast. Sector developments The general economic developments are also reflected in sales trends within the aviation industry. Global Macroeconomic situation The global economic upswing passenger and freight traffic continued to grow in the first half of ­continued in the first six months of 2011. However, it lost pace 2011. However, the pace of growth has been slower since the somewhat in the second quarter. There are also a number of fourth quarter of 2010. According to IATA, sales in passenger ­significant regional differences in economic dynamism. ­traffic grew by 6.8 per cent in the first five months of 2011 and sales in cargo traffic by 2.0 per cent. In the USA expansion has slowed tangibly. By contrast, Europe has seen strong expansion in export-driven economies such as Trends here still differ widely in different regions. Strong growth Germany and Finland, while the economic climate in peripheral continued in Latin America, where sales soared by some 17 per states such as Greece, , and Ireland has darkened cent in the first five months. Due to the airspace closures last year, substantially following harsh austerity measures. At a global level, Europe also recorded growth of 11 per cent. In both Asia/Pacific economic growth of 3.0 per cent is nevertheless projected for the and North America, sales were up some 4 per cent. Asia continued second quarter of 2011. to be affected by a weak Japanese market following the disasters earlier in the year. Sales grew by 8 per cent at airlines­ in the Middle There are several main reasons for the slowdown in economic East and fell by 1.6 per cent at the African airlines. growth. The effects of the earthquake disaster in Japan are still being felt, and other key factors include the dampening effect of The premium segment also grew compared with the same period rising commodity prices and economic policy measures under- of the previous year. Figures provided by IATA show an 8.7 per taken in emerging markets to prevent economic growth from cent increase in sales for the first five months of 2011. However, ­overheating. adjusted for the effects of the airspace closures, growth levelled off here too. The oil price stopped uptrending for the time being in May. After peaking at USD 126.25, a barrel of Brent Crude cost USD 112.48 Since 2011, flights departing from Germany have been subject at the end of the first six months. This still corresponded to a to a one-sided air traffic tax based on the distance flown. Inter­ ­year-on-year increase of 50 per cent, however. Including the jet national transfers and cargo flights are exempt from the tax. crack (price ­difference between crude oil and kerosene) the cost of kerosene also fell towards the end of the second quarter. ­However, it remained 48.6 per cent up on the previous year (see table). Given the impact of fuel costs on profits at Lufthansa, the Group pursues an ongoing hedging policy (see p. 140 of the Annual Report 2010). These steps reduced the effects of the price rise to 21.5 per cent in the first half of the year.

Lufthansa 2nd Interim Report January – June 2011 3 Course of business The standards and interpretations mandatory for the first time as of 1 January 2011 also did not have a significant effect on the Overview The Lufthansa Group continued to develop positively Group’s net assets, financial and earnings position. For further in the first half of 2011. Business developments were hallmarked details, see the notes to the consolidated financial statements by a recovery in demand, which triggered clear sales growth in from p. 30 . almost all segments. This was offset in the second quarter by the one-off impact of the crisis-hit regions in Japan, North Africa and the Middle East along with the oil price, which remained high. In Earnings position this environment, the Lufthansa Group succeeded in substantially boosting both its revenue and its operating result in the first half Revenue and income Traffic at the Lufthansa Group improved of 2011 compared with the same period of 2010, which was also considerably in the first half of 2011 compared with the same negatively affected by one-off effects. period last year. The number of passengers transported rose to 50.2 million (+10.1 per cent) in the first two quarters of 2011, while Overall, the Passenger Airline Group posted a much improved the volume of freight and mail increased to a total of 1.1 million operating result, although developments at the different airlines tonnes (+13.9 per cent). These performance figures include the varied. The operating profits generated by the Logistics business traffic figures for Germanwings for the first time, although this does segment fell only slightly short of the previous year’s record level. not have a significant effect on overall performance. Last year’s Revenue rose further at the MRO segment. However, provisions figures have been adjusted to facilitate comparison. The individual weighed on the result, which therefore remained below the previ- performance data for the separate segments is presented in the ous year’s figure. The IT Services segment was also unable to respective chapters. match its 2010 result in full. By contrast, the Catering business segment was able to build on its good performance from the first Traffic figures of the Lufthansa Group’s airlines quarter 2011 and further improved its operating profits year on year. Jan. – June Jan. – June Change 2011 2010 in % We believe that the different factors that affected results in the first half confirm that it is prudent to continuously examine our Passengers carried thousands 50,234 45,627 10.1 competitiveness and strengthen it where necessary. For this Available seat-kilometres millions 129,098 115,394 11.9 ­reason, we will keep pursuing the respective programmes in all Revenue seat-kilometres millions 97,337 89,219 9.1 business segments. A number of further initiatives was also Passenger load factor % 75.4 77.3 – 1.9 added in the second quarter. thousand Freight / mail tonnes 1,070 939 13.9 Available cargo Staff and management Lufthansa and the Vereinigung Cock- tonne-kilometres millions 8,238 7,307 12.8 pit pilots’ union agreed on a new wage settlement on 29 June Revenue cargo tonne-kilometres millions 5,487 5,037 8.9 2011. This comprises a pay rise of around 3.5 per cent for the Cargo load factor % 66.6 68.9 – 2.3 pts circa 4,500 pilots at Lufthansa Passenger Airlines, Lufthansa Total available Cargo and Germanwings. This is equivalent to an annual pay tonne-kilometres millions 20,624 18,558 11.1 increase of 3.2 per cent. The contract is valid until the end Total revenue of April 2012. tonne-kilometres millions 14,752 13,666 7.9 Overall load factor % 71.5 73.6 – 2.1 pts Flights number 557,760 526,934 5.9 At the end of the first half, the Lufthansa Group employed a total of 118,766 people; this is 1.6 per cent more than in the previous year. The increased traffic led to a growth of 13.7 per cent in traffic reve­ Changes in the group of consolidated companies and in nue to EUR 11.6bn in the first half. Higher volumes accounted for reporting standards There were no significant changes to the 9.1 per cent of the additional income and higher prices (including group of consolidated companies compared with the same period fuel surcharge and air traffic tax) for 4.5 per cent. Exchange rates last year. The individual changes compared with year-end 2010 had a negligible effect on income (+ 0.1 per cent). The Passenger and 30 June 2010 are shown in the table on p. 30 – 31 . These ­Airlines Group accounted for EUR 9.9bn (+13.8 per cent) of traffic changes had no significant effect on the consolidated balance revenue and the Logistics segment for EUR 1.4bn (+17.6 per cent). sheet and income statement in comparison with the same period last year.

4 Lufthansa 2nd Interim Report January – June 2011 To our shareholders Interim management report | Interim financial statements | Further information Course of business Earnings position

Expenses Operating expenses rose by a total of EUR 1.0bn External revenue share of the business segments in % (as of 30.6.2011) (+ 7.3 per cent) to EUR 15.3bn. This was primarily due to a 14.3 per cent rise in the cost of materials and services, which Catering 5.8 IT Services 0.8 came in at EUR 8.4bn. This increase stemmed above all from the EUR 598m (24.6 per cent) climb in fuel costs to EUR 3.0bn. MRO 8.3 In addition to the 21.5 per cent increase in fuel prices (after Logistics 10.6 Passenger Airline ­hedging), volumes also contributed 9.6 per cent to expenses. Group 74.5 By contrast, the US dollar’s performance reduced costs by 6.5 per cent. Fuel expenses include a positive result from price hedging of EUR 434m. Other raw materials, consumables and supplies were up by 8.5 per cent to EUR 1.3bn.

Expenses At EUR 2.5bn, other revenue was 1.8 per cent up on the previous year. Of this, the MRO segment generated EUR 1.2bn (– 0.5 per Jan. – June Jan. – June Change 2011 2010 cent), IT Services EUR 110m (– 6.0 per cent) and Catering EUR 819m (+ 2.5 per cent). The airborne companies in the Passenger in €m in €m in %

Airline Group and Logistics segment contributed EUR 371m Cost of materials and services 8,353 7,305 14.3 (+11.1 per cent) to other revenue. of which fuel 3,029 2,431 24.6 of which fees and charges 2,549 2,163 17.8 Group revenue therefore climbed year on year by 11.4 per cent of which operating lease 95 134 – 29.1 to EUR 14.1bn. The graph on p. 6 shows revenue for the last Staff costs 3,393 3,193 6.3 five years. The Passenger Airline Group’s share of total revenue Depreciation 836 798 4.8 rose to 74.5 per cent (+1.1 percentage points). The distribution Other operating expenses 2,689 2,931 – 8.3 of revenue by segments and regions is shown in the segment Total operating expenses 15,271 14,227 7.3 reporting on p. 35 . Fees and charges rose by 17.8 per cent, primarily due to greater Other operating income fell by 8.0 per cent to EUR 1.3bn. This traffic. Key factors here were increases in air traffic control charges decrease was largely due to lower income from disposals of (+12.7 per cent), take-off and landing fees (+13.1 per cent) and ­non-current assets (EUR – 152m). Last year, this figure included passenger fees (+18.1 per cent). The new air traffic tax accounted profits from the transfer of shares in Fraport to the Lufthansa for expenses of EUR 162m. Other purchased services totalled ­Pension Trust (EUR 94m) and book gains from the sale of 6.2 mil- EUR 1.5bn, 2.6 per cent less than last year, due primarily to lower lion shares in Amadeus IT Holding S.A. (EUR 67m). Furthermore, expenses for external MRO services. income from write-ups on capital assets dropped by EUR 40m principally due to the development of the US dollar. Exchange rate Staff costs rose by 6.3 per cent in conjunction with a 0.7 per cent gains, which also shrank (EUR – 25m), correspond with exchange increase in the average annual number of employees to 118,109. rate losses in other operating expenses. Other income related The rise stemmed from higher performance-related pay, additional partly to refunds received in the first quarter of air traffic control expenses due to exchange rate movements and higher additions charges paid in prior years and to compensation received for to pension provisions. The latter went up as a result of the lower the delayed delivery of Airbus A380 aircraft. Other items did not discount rate and an additional funding obligation towards pension vary significantly compared with the previous year. funds.

Total operating income therefore went up by EUR 1.3bn or 9.0 per cent to EUR 15.4bn.

Lufthansa 2nd Interim Report January – June 2011 5 Depreciation and amortisation rose by 4.8 per cent to EUR 836m. Depreciation of aircraft, mainly new purchases from last year and Operating result and net profit/loss for the period in €m (Jan. – June) this year, accounted for EUR 42m (6.6 per cent) of the increase. 992 Of total impairment losses of EUR 7m, EUR 6m related to two Boeing B737-500s and eight Canadair Regional Jet 200s, which 677 were decommissioned in the first quarter or are held for disposal. 486 381 Other operating expenses include additional impairment of EUR 10m relating in particular to five Boeing B737-500s, two 8 ­Airbus A330-200s and four Canadair Regional Jet 200s held for 3 sale. All in all, however, other operating expenses dropped to – 104 EUR 2.7bn (– 8.3 per cent). This change was brought about by – 178 – 171 – 206 lower exchange rate losses (EUR – 398m). Of this sharp drop, 2007 2008 2009 2010 2011 EUR 178m is attributable to a fall in expenses from the valuation ­ Operating result Net profit/loss for the period of financial liabilities. The exchange rate losses correspond with exchange rate gains in other operating income. Expenses were driven up by factors including higher staff-related costs (EUR + 42m) In the reporting period, the result from equity investments was and rises in both credit card commissions (EUR +13m) and EUR 5m down on the previous year’s figure at EUR 17m. ­com­puterised distribution systems (EUR +10m). The individual This decrease is attributable to the lower result of investments other items did not vary significantly compared with last year. accounted for using the equity method (EUR – 18m), largely caused by SN Airholding, Sun Express and Jade Cargo (see Earnings development After the Group posted a loss from ­comments under Passenger Airline Group and Logistics). operating activities in the first half of 2010, it was able to improve Net interest fell by EUR 6m to EUR – 153m. on this in the first half of 2011 and post a profit of EUR 164m (an increase of EUR 230m) for the first six months of 2011 despite The result from other financial items slumped by EUR 417m to the above-mentioned difficulties. EUR – 309m. Of this total, expenses of EUR 131m were accounted­ for by negative changes in the value of hedging instruments Following regular adjustments for the items listed in the table classed as held for trading as per IAS 39. Last year, the ­valuation on p. 7 , the operating result also improved by EUR 174m to come of these financial derivatives generated income of EUR 170m. in at a positive EUR 3m. As a result, the adjusted operating margin In addition to this, changes in the fair values of options used for went up by 1.4 percentage points to 0.4 per cent. This is calcu- hedging (primarily fuel hedges) amounting to EUR – 157m (previous lated as operating result plus write-backs of provisions divided by year: EUR – 64m) were also recognised in the financial result in revenue. line with IAS 39. However, expenses arising from changes in the fair value of options must be viewed in connection with the hedg- ing gains and losses realised and changes to the intrinsic value Revenue development in €m (Jan. – June) of hedging transactions, which are recognised directly in equity. As a result, the positive result of hedging considerably alleviated 10,089 12,057 10,226 12,625 14,063 fuel costs by EUR 434m in the first half-year. Even after the deduc- tion of these derivatives that had become due, the intrinsic value of the fuel hedging transactions rose by EUR 265m.

Earnings before interest and taxes (EBIT) reflect developments in the operating result, the result from equity investments and other financial items. The figure came to EUR – 128m (previous year: 2007 2008 2009 2010 2011 EUR 64m).

Earnings before income taxes (EBT) fell by EUR 198m to EUR – 281m at the end of the first six months. As the pre-tax result was negative, income taxes improved the result by EUR 82m.

6 Lufthansa 2nd Interim Report January – June 2011 To our shareholders Interim management report | Interim financial statements | Further information Earnings position Cash flow and capital expenditure

After deducting minority interests (EUR 7m), the Group posted a reduced the figure by EUR 135m compared with last year. Despite net loss for the period of EUR – 206m. This was EUR 102m down increased business volume, the change in the working capital on the previous year’s figure of EUR – 104m. Earnings per share remained at the previous year’s level due to negative exchange were therefore EUR – 0.45 (previous year: EUR – 0.23). Adjusted rate effects. for the effect on earnings of the above-mentioned changes in the fair value of options, earnings per share would have improved to EUR – 0.17 (previous year adjusted: EUR – 0.12). Cash flow and capital expenditure in €m (as of 30.6.2011)

1,437 1,740 883 857

Cash flow and capital expenditure 78 144 In the first half of the 2011 financial year, the Lufthansa Group increased its cash flow from operating activities by EUR 320m to 1,215 EUR 1.7bn. Based on a EUR 198m drop in the profit/loss before income taxes, non-cash expenses of EUR 288m from changes in the market value of financial derivatives (previous year: income of Gross capital Cash flow from Net capital Free EUR 122m) were eliminated when calculating cash flow because expenditure operating expenditure cash flow activities they do not affect the cash flow from operating activities. Elimi­ Financial investments nating non-cash depreciation and amortisation resulted in a further Secondary investments increase of EUR 95m in cash flow, whereas income tax payments Primary investments

Reconciliation of results

Jan. – June 2011 Jan. – June 2010 Income Reconciliation with Income Reconciliation with in €m statement operating result statement operating result

Total revenue 14,063 12,625 Changes in inventories 24 70 Other operating income 1,348 1,466 of which book gains and current financial investments – 62 – 211 of which income from reversal of provisions – 53 – 44 of which write-ups on capital assets – 3 – 43 of which period-end valuation of non-current financial liabilities – 131 – 26 Total operating income 15,435 – 249 14,161 – 324

Cost of materials and services – 8,353 – 7,305 Staff costs – 3,393 – 3,193 of which past service cost 20 – 2 Depreciation, amortisation and impairment – 836 – 798 of which impairment losses 7 7 Other operating expenses – 2,689 – 2,931 of which impairment losses on assets held for sale – non-operating 10 0* of which expenses incurred from book losses and current financial investments 27 12 of which period-end valuation of non-current financial liabilities 24 202 Total operating expenses – 15,271 88 – 14,227 219

Profit / loss from operating activities 164 – 66 Total from reconciliation with operating result – 161 – 105 Operating result 3 – 171

Result from equity investments 17 22 Other financial items – 309 108 EBIT – 128 64

Write-downs (included in profit from operating activities) 836 798 Write-downs on financial investments, securities and assets held for sale 31 14 EBITDA 739 876

* Rounded below EUR 1m.

Lufthansa 2nd Interim Report January – June 2011 7 Gross capital expenditure came to EUR 1.4bn, of which EUR Assets and financial position 1.2bn was for a total of 28 aircraft (three Airbus A380s, two A330s, seven A321s, two A320s, two Boeing B737s, two B767s, seven At EUR 29.5bn, the consolidated balance sheet total at the end Bombardier CRJ 900s, two Embraer 195s and one ATR 700) as of the first half-year 2011 was EUR 197m more than at year-end well as for aircraft overhauls and down payments. An additional 2010. Non-current assets rose by EUR 125m, while current assets EUR 103m was invested in other property, plant and equipment. grew by EUR 72m. Intangible assets accounted for EUR 41m of the remaining capital expenditure. Financial investments of EUR 78m related mainly Within non-current assets, the item aircraft and reserve engines to loans. Disposals of repairable spare parts for aircraft generated increased by EUR 618m to EUR 11.8bn due to additions. inflows of EUR 18m. The funding requirement was partly covered by interest and dividend income (EUR 248m in total) and proceeds The decline of EUR 76m in other equity investments is largely due of EUR 287m from the disposal of assets – in particular aircraft to the changes in the market value of the shares in Amadeus IT and non-current securities. Cash proceeds of EUR 662m were Holding S.A. (EUR – 42m) and in JetBlue (EUR – 32m). Derivative generated by the acquisition and disposal of current securities financial instruments fell by a total of EUR 162m, principally due and funds. Net cash totalling EUR 221m was therefore used for to currency and interest rate hedges, offset by an increase in fuel the Group’s investing and cash management activities (previous hedges. year: EUR 1.1bn). Non-current securities sank by EUR 119m due in large part to Free cash flow was once again generated in the first half of 2011. the disposal of the borrower’s note loans. This is defined as cash flow from operating activities less net ­capital expenditure and came to a solid EUR 857m. Within current assets, receivables increased by EUR 820m for seasonal and billing reasons and due to the greater volume of The balance for financing activities was a net cash outflow of business. The rise in current financial derivatives (+ EUR 131m) EUR 1.4bn. A minor amount of new fundraising (EUR 113m) was was largely attributable to fuel hedges, which were offset by a fall outweighed by dividend payments (EUR 286m), regular debt in the market value of currency hedges. Cash and cash equiva- repayments (EUR 547m) and interest payments of EUR 269m. lents – consisting of current securities, bank balances and cash- Moreover, the good liquidity position of the financial structure in-hand – went down by a total of EUR 748m to EUR 4.6bn. was used and five borrower’s note loan tranches in total worth ­Non-current assets continued to account for 64.7 per cent of total EUR 407m were paid back early. assets, as at year-end 2010.

Cash and cash equivalents rose by EUR 135m to EUR 1.2bn. This Shareholders’ equity (including minority interests) was reduced by includes appreciation of EUR 4m due to exchange rate movements. EUR 506m (– 6.1 per cent) to EUR 7.8bn as of the reporting date. This decline stems primarily from the negative after-tax result of The internal financing ratio was 121.1 per cent (previous year: EUR 199m and dividend payments of EUR 286m to shareholders 145.8 per cent). Overall, cash including securities at the end of the in Deutsche Lufthansa AG and minority interests. Negative changes first half fell to EUR 4.6bn (previous year: EUR 5.4bn). The detailed in the market value of financial assets prompted a further fall of cash flow statement can be foundon p. 29 . EUR 53m. EUR 12m of this resulted from the higher intrinsic value of financial derivatives used to hedge fuel price, exchange rate and interest rate risks. Due to positive currency translation differ- ences, shareholders’ equity rose by EUR 36m. The equity ratio dropped to 26.5 per cent (year-end 2010: 28.4 per cent).

Non-current liabilities and provisions fell by EUR 1.0bn to EUR 10.1bn, while current borrowing went up by EUR 1.7bn. Under non-current liabilities, financial borrowing fell by a total of EUR 959m, largely thanks to the early repayment of the borrower’s note loans and to maturities, while the negative market value of derivative financial instruments (principally used for currency and interest- rate hedging) rose by EUR 213m. Pension provisions shrank by EUR 79m to EUR 2.5bn in line with further funding of commitments via external pension funds.

8 Lufthansa 2nd Interim Report January – June 2011 To our shareholders Interim management report | Interim financial statements | Further information Cash flow and capital expenditure Assets and financial position

Within current liabilities, financial borrowing went down by Calculation of net indebtedness and gearing EUR 87m. This increase was due to maturities and was offset in the reporting period by capital repayments. Trade liabilities and Jan. – June 31 Dec. Change as of 2011 2010 31 Dec. other financial liabilities climbed (EUR + 469m) as did liabilities 2010 from unused flight documents (EUR +1.3bn). This was attributable in €m in €m in % to seasonal and billing factors and also to the greater volume of Liabilities to banks 1,152 1,925 – 40.2 business. Bonds 2,121 2,177 – 2.6 Other non-current borrowing 2,865 3,082 – 7.0 At the end of the first half of 2011, net indebtedness (including 6,138 7,184 – 14.6 non-current liquidity reserves of EUR 110m) went down to EUR Other bank borrowing 31 23 34.8 1.4bn. At year-end 2010 the figure had still been at EUR 1.6bn. Group indebtedness 6,169 7,207 – 14.4 Gearing including pension provisions was virtually unchanged Cash and cash equivalents 1,232 1,097 12.3 on year-end 2010 at 50.0 per cent and was therefore still in the Securities 3,400 4,283 – 20.6 middle of the target range of 40 to 60 per cent. Non-current securities (liquidity reserve)* 110 231 – 52.4 Net indebtedness 1,427 1,596 – 10.6

Pension provisions 2,492 2,571 – 3.1 Net indebtedness and pensions 3,919 4,167 – 6.0

Gearing in % 50.0 50.0 0.0 pts

* Realisable at any time.

Group fleet – Number of commercial aircraft Deutsche Lufthansa AG (LH), SWISS (LX), (OS), British Midland (bmi), Germanwings (4U), Lufthansa CityLine (CLH), (EN), (EW) and (LCAG) as of 30.6.2011

Manufacturer / type LH LX OS bmi 4U CLH EN EW LCAG Group of which of which Change Change fleet finance operating as of as of lease lease 31.12.10 30.6.10

Airbus A300 0 – – 2 Airbus A310 23) 2 – – 1 30 7 7 11 30 85 4 21 – + 2 Airbus A320 46 25 9 7 87 11 6 + 3 + 4 Airbus A321 51 7 6 7 71 5 5 + 7 + 8 Airbus A330 15 17 2 34 6 – + 1 Airbus A340 50 13 22) 65 2 2 – 1 – 2 Airbus A380 7 7 + 3 + 6 Boeing 737 63 11 14 88 3 11 – – Boeing 747 30 30 – – Boeing 767 6 6 2 – – Boeing 777 4 4 – – Boeing MD-11F 18 18 – – 1 Bombardier CRJ 311) 2 36 8 77 8 – – 8 Bombardier C-Series 0 – – Bombardier Q-Series 14 14 – 5 – 4 ATR 51) 6 2 13 7 – 3 – 9 Avro RJ 20 14 34 15 – 2 – 4 BAe 146 0 – – 2 Embraer 261) 43) 33) 19 52 3 9 + 3 + 8 Fokker F70 9 9 1 – – Fokker F100 15 15 – – Cessna Citation 0 – 4 – 4 Total aircraft 356 93 88 60 30 50 6 10 18 711 31 90 1 – 8

1) Let to airlines. 3) Leased to company outside the Group. 2) Let to SWISS.

Lufthansa 2nd Interim Report January – June 2011 9 Passenger Airline Group business segment

of which Lufthansa Key figures Passenger Airline Group Passenger Airlines 3)

Jan. – June Jan. – June Change April – June April – June Change Jan. – June Jan. – June Change 2011 2010 in % 2011 2010 in % 2011 2010 in %

Revenue €m 10,851 9,567 13.4 6,002 5,244 14.5 7,394 6,377 15.9 of which with companies of the Lufthansa Group €m 373 301 23.9 194 162 19.8 Operating result €m – 239 – 342 30.1 152 31 390.3 – 100 – 203 50.7 Segment result €m – 248 – 308 19.5 183 73 150.7 EBITDA 1) €m 571 175 226.3 581 312 86.2 425 115 269.6 Segment capital expenditure €m 1,250 891 40.3 622 407 52.8 Employees as of 30.6. number 58,687 57,207 2.6 58,687 57,207 2.6 38,842 37,022 4.9 Passengers 2) thousands 50,234 45,627 10.1 28,147 24,983 12.7 31,225 27,190 14.8 Available seat-kilometres 2) millions 129,098 115,394 11.9 68,763 60,863 13.0 87,978 76,865 14.5 Revenue seat-kilometres 2) millions 97,337 89,219 9.1 53,603 48,280 11.0 66,621 59,815 11.4 Passenger load factor 2) % 75.4 77.3 – 1.9 pts 78.0 79.3 – 1.3 pts 75.7 77.8 – 2.1 pts

1) Before profit/loss transfer from other companies. 2) Lufthansa Passenger Airlines, SWISS, bmi, Austrian Airlines and Germanwings. 3) Including regional partners.

Course of business In the first half of 2011, the Passenger Airline In the reporting period, passenger figures rose by 10.1 per cent to Group was able to maintain the positive trend recorded at the 50.2 million. While the number of flights increased by 5.7 per cent, beginning of the year and improved on its 2010 result. The half- the available seat kilometres climbed by 11.9 per cent as a result year figures reflect the positive ongoing macroeconomic trend, of the ongoing fleet rollover, which introduced larger aircraft, and especially in Germany. However, profits were also curbed by the the new Europa cabin. Sales went up by 9.1 per cent. On top of consequences of the disasters in Japan and the unrest in North this sales growth came a 4.3 per cent increase in average yields. Africa and the Middle East. High fuel prices also continued to have The passenger load factor came to 75.4 per cent (– 1.9 percent- an adverse effect. age points). Traffic revenue went up by 13.8 per cent.

Segment structure The segment includes ­Lufthansa Passenger Sales were up considerably in all traffic regions, with average Airlines, SWISS, Austrian Airlines, bmi and Germanwings, as yields rising simultaneously. The passenger load factor also well as the equity investments in Brussels ­Airlines, JetBlue and improved somewhat in European traffic (see table on p. 11 ). ­SunExpress. Our aim of becoming Europe’s leading airline group is supported by means of extensive cooperations within the group, In the European traffic region, capacity was expanded significantly which generate significant ­synergies and ­competitive advantages. by installing new seats in the short-haul fleet. This additional capac- ity was sold in full. At the same time average yields increased by Operating performance Since the beginning of 2011, the traffic 2.2 per cent on last year; traffic revenue climbed by 14.2 per cent. data for Germanwings has been included in the Passenger Airline Group’s figures for the first time. The figures for the previous year have been adjusted accordingly. The inclusion had no significant effect on the development of the traffic figures for the segment.

10 Lufthansa 2nd Interim Report January – June 2011 To our shareholders Interim management report | Interim financial statements | Further information Passenger Airline Group

In America, sales growth of 9.8 per cent was recorded. Here Other operating income fell by 3.6 per cent to EUR 639m. This too, the volume growth was accompanied by a positive trend was because lower exchange rate gains (EUR – 104m) offset addi- in average yields (+ 4.3 per cent). Traffic revenue went up by tional income from refunds of air traffic control charges paid in 14.6 per cent. prior years and compensation payments received for the delayed delivery of Airbus A380 aircraft in the first quarter. In the Asia/Pacific traffic region, the segment was able to increase sales by 6.9 per cent despite the disasters in Japan. The segment Total operating income went up by 12.3 per cent to EUR 11.5bn. also recorded pleasing growth in both average yields (+ 7.4 per cent) and traffic revenue (+14.8 per cent). Operating expenses increased at a slower rate year on year, rising by 10.9 per cent to EUR 11.7bn. The main reason was the sharp Sales were also up 6.0 per cent in the Middle East/Africa region. rise in the cost of materials and services to EUR 7.3bn (+14.6 per However, political unrest had an adverse effect on traffic. ­Average cent), of which the main driver was a 22.5 per cent increase in fuel yields nevertheless rose by 2.1 per cent, traffic ­revenue improved costs to EUR 2.8bn. by 8.3 per cent on last year. Fees and charges climbed by a total of 17.4 per cent to EUR Revenue and earnings development Increased traffic meant 2.4bn, largely as a result of greater traffic and the first-time levy that the segment’s traffic revenue climbed year on year to of the air traffic tax (EUR 162m). Alongside higher air traffic control EUR 9.9bn (+13.8 per cent). Higher sales volumes accounted charges (+12.1 per cent), steep rises were seen above all in for 9.1 per cent of the increase, with higher prices contributing ­passenger fees (+18.1 per cent) and take-off and landing fees 4.4 per cent and positive exchange rate effects a further 0.3 per (+12.6 per cent). cent. In total, revenue grew to EUR 10.9bn (+13.4 per cent).

Trends in traffic regions Passenger Airline Group

Net traffic revenue Number of passengers Available seat-kilometres Revenue seat-kilometres Passenger load factor in €m external revenue in thousands in millions in millions in % Jan. – June Change Jan. – June Change Jan. – June Change Jan. – June Change Jan. – June Change 2011 in % 2011 in % 2011 in % 2011 in % 2011 in pts

Europe 4,676 14.2 40,075 11.0 45,570 11.6 31,539 11.7 69.2 0.1 America 2,342 14.6 4,212 9.5 38,143 12.4 31,265 9.8 82.0 – 1.9 Asia / Pacific 1,886 14.8 2,942 8.3 28,640 13.1 22,655 6.9 79.1 – 4.6 Middle East / Africa 963 8.3 2,488 1.6 14,860 10.4 10,468 6.0 70.4 – 2.9 Total scheduled services 9,867 13.8 49,717 10.2 127,214 12.0 95,927 9.3 75.4 – 1.9 Charter 82 16.8 518 3.3 1,884 3.8 1,410 – 2.6 74.9 – 4.9 Total 9,949 13.8 50,234 10.1 129,098 11.9 97,337 9.1 75.4 – 1.9

Lufthansa 2nd Interim Report January – June 2011 11 While the average annual workforce expanded by 1.6 per cent, Segment capital expenditure increased to EUR 1.3bn, 40.3 per cent staff costs rose by 8.6 per cent. Higher additions to pension above last year’s figure. This rise was driven by capital expenditure ­provisions, higher performance-related pay, and cost increases on new aircraft. In the first six months, this expenditure related due to exchange rate movements were all responsible. to three Airbus A380s, two A330s, seven A321s, two A320s, two Boeing B737s, two B767s, seven Bombardier CRJ 900s, two Depreciation and amortisation was up by 9.7 per cent to a total of Embraer 195s and one ATR 700. EUR 670m mainly due to new aircraft deliveries this year and last. Forecast In the first half of 2011, many regions experienced an At EUR 1.8bn, other operating expenses remained virtually on a ongoing recovery in demand and sales. However, these positive par with last year (+ 0.5 per cent). Higher credit card commissions effects were dampened by the impact of the above-mentioned and indirect staff costs were offset by lower exchange rate losses ­crises in North Africa and Japan and the considerably higher oil and agency commissions. price. These factors affect the business segment’s various com­ panies to different extents. The operating result for the first six months was 30.1 per cent higher than that for the same period last year (EUR – 342m) at In the second half of the year, both the oil price and demand will EUR – 239m. Lufthansa Passenger Airlines and SWISS were the remain prone to fluctuations, especially in the crisis-hit areas. driving forces behind this improved result. Comments on the All the companies in the Passenger Airline Group are therefore ­earnings contributions from the individual airlines can be found continuing with their individual restructuring measures and pro- on the following pages. grammes to safeguard earnings. As regards capacity, all the com- panies are revising their plans for the winter flight timetable and Other segment income came in at EUR 67m (previous year: adjusting them to the new demand climate. Lufthansa Passenger EUR 75m) and was attributable above all to book gains on the Airlines is continuing unabated with its Climb 2011 programme ­disposal of non-current assets (EUR 30m) and income from and the restructuring at Austrian Airlines and bmi is being stepped the write-back of provisions (EUR 34m). up further.

Other segment expenses came to EUR 41m (previous year: All in all, the Passenger Airline Group is still expected to post EUR 11m). Past service costs in connection with additional fund- ­year-on-year improvements in its revenue and operating result in ing obligations towards pension funds accounted for EUR 20m the 2011 financial year. of this. Of total impairment losses of EUR 17m, EUR 16m related to seven Boeing B737-500s, two Airbus A330-200s and twelve Bombardier CRJ 200s, which have been decommissioned or are held for disposal. The result of the equity valuation of EUR – 35m (previous year: EUR – 30m) relates particularly to SN Airholding (EUR – 27m) and SunExpress (EUR – 8m). The segment result improved overall by EUR 60m to EUR – 248m.

12 Lufthansa 2nd Interim Report January – June 2011 To our shareholders Interim management report | Interim financial statements | Further information Passenger Airline Group

Lufthansa Passenger Airlines At the beginning of June, the newly established joint venture for Lufthansa Passenger Airlines with ANA, Japan’s largest airline, was given antitrust clearance by the Japanese competition author- The result for the first six months of 2011 at Lufthansa Passenger ities. The strategic partnership, to be realised on the routes between Airlines was also adversely affected by the events in Japan, Europe and Japan in the coming winter flight timetable, includes North Africa and the Middle East. In addition to this, cost pressure sales activities combining the interests of both companies and the remains high for European traffic. Lufthansa Passenger Airlines is introduction of joint flight plans. This will offer passengers seam- countering this by taking action within its Climb 2011 programme, less connections. such as installing new seats in the Europa cabin and pushing ­forward with the fleet rollover (see p. 85 of the Annual Report 2010). Since the second quarter, Lufthansa Passenger Airlines has Clear reductions in unit costs in the first two quarters are testimony been serving two new Airbus A380 destinations: San Francisco to the effectiveness of these measures. Lufthansa Passenger and Miami. Singapore has already been named as a new A380 ­Airlines successfully sold the associated higher capacity on Euro- destination for the winter flight timetable. Four new destinations pean routes and even managed to increase average yields slightly. were also added to the flight timetable for departures from Munich, namely Antalya, , Malta and . In its 2011 summer Lufthansa Passenger Airlines transported a total of 31.2 million flight timetable, Lufthansa Passenger Airlines flies to 211 destina- passengers in the first six months of 2011. This corresponds to an tions in 84 countries. increase of 14.8 per cent on last year. Capacity grew by 14.5 per cent as a result of the above-mentioned measures. Sales rose Flight prices were adjusted worldwide for the long-haul network by 11.4 per cent. At 75.7 per cent, the passenger load factor was on 5 April. With the exception of special offers, Economy fares therefore 2.1 percentage points down on 2010. At the same time, were increased by between EUR 20 and EUR 40, while Business average yields developed positively, climbing by 4.3 per cent. Class fares went up by between EUR 50 and EUR 100. Customers All in all, Lufthansa Passenger Airlines increased its traffic revenue have also been able to book new, good-value tickets for one-way by 16.1 per cent on the previous year to EUR 6.8bn. Revenue flights within Germany since 1 April. saw a comparable improvement, rising 15.9 per cent to EUR 7.4bn. Lufthansa was named “Best Transatlantic Airline” at the World As regards costs, EUR 834m in additional expenses had to be ­Airline Awards 2011 in late June. Lufthansa Passenger Airlines recouped compared with the same period in 2010. These largely was also voted first place in the categories “Best Business Class related to greater expenses for fuel (EUR + 356m), along with fees in German and European Traffic” and “Best Airline Website for and charges (EUR + 290m). Nevertheless, the segment improved Business Travellers” by the readers of the magazine Business its operating result by EUR 103m compared with last year, taking Traveller Deutschland. Lufthansa FlyNet was also picked as it to EUR – 100m. ­“Product of the Year 2011” by the computer magazine Chip.

Lufthansa Passenger Airlines wants to further gear itself towards Lufthansa Passenger Airlines will continue to concentrate on market requirements. Therefore, a new organisational structure ­selling its structural increases in capacity in line with market has been introduced on 1 April 2011 and important decisions requirements and will also keep pursuing the other measures concerning the future set-up have been taken (for details see entailed in its Climb 2011 programme. This initiative is expected p. 97 of the Annual Report 2010). to reduce unit costs considerably, especially in European traffic. In the long-haul regions, the crises are expected to ease – at Lufthansa Passenger Airlines also decided to change its strategy least in Japan – with a positive effect on business. Lufthansa for the Italian market. The Lufthansa Italia brand introduced in ­Passenger Airlines therefore still expects to post a year-on-year 2008 will cease flight operations at the end of the summer flight increase in its revenue and operating result for the full twelve timetable. To compensate for this, Lufthansa Passenger Airlines months. will significantly step up its capacity on services to . The more streamlined structure on the Italian market shall help to focus ­Lufthansa’s strong market position.

Lufthansa 2nd Interim Report January – June 2011 13 Other Group airlines

SWISS Austrian Airlines

Jan. – June Jan. – June Change Jan. – June Jan. – June Change 2011 2010 in % 2011 2010 in %

Revenue €m 1,870 1,583 18.1 Revenue €m 949 964 – 1.6 Operating result €m 104 54 92.6 Operating result €m – 64 – 70 8.6 EBITDA €m 242 157 54.1 EBITDA €m 39 7 457.1 Passengers carried thousands 7,774 7,032 10.6 Passengers carried thousands 5,094 5,001 1.9 Employees as of 30.6. number 7,820 7,609 2.8 Employees as of 30.6. number 6,898 7,557 – 8.7

Further information on SWISS can be found at www.swiss.com. Further information on Austrian Airlines can be found at www.aua.com.

The first half of 2011 went well for SWISS. The company succee­ The operating environment was much more difficult for Austrian ded in increasing revenue to EUR 1.9bn and raised its operating Airlines in the first half of 2011 than originally anticipated. The high result to EUR 104m, thereby almost doubling it compared with the oil price depressed the airline’s result. In addition to this, another ­previous year. In particular, the second quarter of 2011 was a two of Austrian Airlines’ strategic pillars – the Middle East and Japan vast improvement on that of 2010, when business was hit by air- – were hit by negative one-off factors. This came after another key space closures. Thanks to growing demand, especially in the region, Central and Eastern Europe, felt the impact of the financial intercontinental sector, the airline was largely able to compensate markets crisis. for the persistently negative trend in fuel prices and currencies. European traffic continues to be impacted by the ongoing pres- Despite the above-mentioned negative effects, Austrian Airlines sure on average yields. succeeded in nudging up its passenger numbers by 1.9 per cent to a total of approximately 5.1 million in the first six months of Compared with the first six months of 2010, passenger figures 2011. The passenger load factor fell by 3.4 percentage points rose by over 10 per cent to 7.8 million in the same period of 2011. compared with last year to 70.8 per cent as a 4.2 per cent SWISS extended its capacity by 11.8 per cent. The passenger increase in capacity coincided with a drop of 0.6 per cent in sales. load factor remained virtually unchanged at 79.3 per cent. Revenue also declined in the first half of 2011 by 1.6 per cent to SWISS is expanding its fleet, from 2012 adding five Airbus A330- EUR 949m. However, the operating result improved year on year 300s, three A320s and two A321s. From 2014, it will replace its to EUR – 64m (EUR + 6m). Avro-RJ regional fleet completely by more environmentally friendly aircraft from the Bombardier C-Series. In total, SWISS is expecting One of Austrian Airlines’ priorities is to constantly improve quality 40 new aircraft over the next few years. also devel- and cater for customers’ needs. Its efforts were rewarded with two oped successfully. It added a second long-haul plane to its fleet in prizes – “Best Business Class Catering” and “Staff Service Excel- the form of a new Airbus A330-300. lence Europe” – at the World Airline Awards in the second quarter. Medium-haul aircraft will be fitted with the new Europa cabin by SWISS was voted “Best Airline Western Europe” as part of the autumn 2011; in winter 2012/2013, the long-haul fleet’s cabins will Skytrax World Airline Award in June. As of September, it will have then be completely renewed. a uniform, refurbished Business Class on all long-haul flights. SWISS will also start offering a First Class service on all interconti- The company is currently working hard to achieve its earnings nental routes. ­target of a positive operating result despite the unfavourable ­circumstances described above. It is implementing a raft of meas- In 2011, SWISS intends to take on some 500 new employees. ures to do this, some of which have been intensified. Alongside It will create around 600 new jobs with its announced further fleet flexible adjustments to the flight plan, these include a hiring ban expansion commencing in 2012. In early July, SWISS signed a as well as freezing staff costs. The management team expects memorandum of understanding for a new general employment business on the Tokyo – Vienna route to pick up again in summer. contract with the Airbus pilots’ trade union, Aeropers. This is valid In addition to this, the steps initiated to counteract the crises in for five years. the Middle East will take full effect in the third quarter.

Given the difficult environment, 2011 remains a challenging year. However, the management team still aims to match last year’s good result.

14 Lufthansa 2nd Interim Report January – June 2011 To our shareholders Interim management report | Interim financial statements | Further information Passenger Airline Group

British Midland Germanwings

Jan. – June Jan. – June Change Jan. – June Jan. – June Change 2011 2010 in % 2011 2010 in %

Revenue €m 396 417 – 5.0 Revenue €m 293 266 10.2 Operating result €m – 120 – 93 – 29.0 Operating result €m – 46 – 39 – 17.9 EBITDA €m – 103 – 82 – 25.6 EBITDA €m – 26 – 27 3.7 Passengers carried thousands 2,753 2,947 – 6.6 Passengers carried thousands 3,388 3,457 – 2.0 Employees as of 30.6. number 3,851 3,772 2.1 Employees as of 30.6. number 1,276 1,247 2.3

Further information on British Midland can be found at www.flybmi.com. Further information on Germanwings can be found at www.germanwings.com.

The crises in North Africa and the Middle East continued to have Germanwings carried a total of 3.4 million passengers in the first a severe impact on the second quarter result posted by British half of 2011 (– 2.0 per cent). The company reduced its capacity as Midland. At EUR 396m, revenue was down 5.0 per cent on last planned, due in part to the air traffic tax. This enabled it to improve year. The operating result came in at EUR – 120m (previous its load factor to 74.2 per cent (+ 0.2 percentage points) on last year. year: EUR – 93m). Germanwings posted a significant increase in revenue, which rose British Midland consistently upheld its strategy of replacing loss- by 10.2 per cent on the 2010 figure to EUR 293m. However, the making routes on its domestic market with profitable services expenses associated with the air traffic tax and the persistently high to neighbouring countries and medium-haul routes, therefore oil price led to an operating loss of EUR 46m (previous year: closing its base in Glasgow in the second quarter. In addition to EUR – 39m). this, the decision was taken to close bmibaby’s bases in Man- chester and Cardiff when the 2011 winter flight timetable comes By contrast, a number of factors boosted revenue, especially the into effect. Instead, new services from Heathrow to airline’s more in-depth cooperation with Lufthansa. Germanwings ­, ­Marrakesh, Bergen, Stavanger and Basel will be became a member of Miles & More at the end of 2010. Since included in the flight plan. Flights to Tripoli remain suspended ­January 2011, it has been possible to book Germanwings flights throughout the summer flight timetable. It has also been neces- in combination with Lufthansa via global distribution systems. sary to cancel some flights to Damascus due to the unrest in The scope of collaboration in corporate customer business was Syria. also extended.

In the UK home market, the new set of fees introduced by At the same time, Germanwings further improved its in-flight the operator of London will further drive up ­product and boosted revenue as a result. Since the beginning of expenses for flights in the future. British Midland has filed a June, customers travelling in the first ten rows of any aircraft in ­complaint against the new regulations with the Civil Aviation the fleet can enjoy a larger seat pitch. Passengers can either book Authority. this additional leg-room by choosing the “Best Seat” option or as part of the “Best Price” package. The “Best Price” category An additional project has been initiated as part of the strategy comprises the larger seat, one item of luggage, a snack and a ­process to achieve the airline’s goal of medium-term profitability. drink. It is particularly popular with business travellers. This aims to sharpen the company’s focus and thereby improve its earnings position. A sales and marketing initiative was also Germanwings ramped up its services to Italy in the summer launched. However, a negative operating result is still expected flight timetable 2011 and now offers flights to Pisa, , , for 2011. Alongside negative market conditions, this is due to (Sardinia) and (Sicily). high anticipated fuel costs based on forecast price trends and ­British Midland’s relatively low level of hedging by Group stand- The air traffic tax and the high oil price will continue to present ards. In the light of the ongoing difficulties in British Midland’s key challenges for Germanwings throughout the 2011 financial year. markets, an improvement on last year’s operating result looks Nevertheless, the company expects to improve on last year’s unlikely at present. operating result.

Lufthansa 2nd Interim Report January – June 2011 15 Logistics business segment

Key figures Logistics

Jan. – June Jan. – June Change April – June April – June Change 2011 2010 in % 2011 2010 in %

Revenue €m 1,503 1,283 17.1 761 720 5.7 of which with companies of the Lufthansa Group €m 13 12 8.3 7 7 0.0 Operating result €m 133 144 – 7.6 69 109 – 36.7 Segment result €m 137 156 – 12.2 75 117 – 35.9 EBITDA €m 184 216 – 14.8 99 145 – 31.7 Segment capital expenditure €m 35 4 21 3 Employees as of 30.6. number 4,542 4,422 2.7 4,542 4,422 2.7 thousand Freight and mail tonnes 953 830 14.8 484 439 10.3 Available cargo tonne-kilometres millions 6,902 5,765 19.7 3,547 3,033 16.9 Revenue cargo tonne-kilometres millions 4,768 4,170 14.3 2,424 2,209 9.7 Cargo load factor % 69.1 72.3 – 3.3 pts 68.3 72.8 – 4.5 pts

Course of business The first six months of 2011 were dominated The company actively capitalised on growth potential and tapped by positive developments both within the global airfreight market new markets. A number of new destinations was added, including and at Lufthansa Cargo. Growth rates normalised in the course of Shenzhen (China), Lahore (Pakistan), Houston (USA), Kolkata the reporting period, however. In the first half of 2011, Lufthansa (India) and Dhaka (Bangladesh). This means the company links Cargo’s revenue soared to EUR 1.5bn. The operating result was more than 20 cities in Asia alone with its comprehensive route high at EUR 133m, falling just short of last year’s record figure. ­network.

Segment structure In addition to Lufthansa Cargo AG, the The company has been named best several times in Logistics segment includes Lufthansa Cargo Charter Agency recent months, winning prizes at events including the well-known GmbH, the airfreight container specialist Jettainer GmbH and the Cargo Airline of the Year Awards. equity investments in the cargo airlines Jade Cargo International Ltd. and AeroLogic GmbH. Lufthansa Cargo also markets freight Operating performance Traffic developed on a high level in the capacities on passenger aircraft operated by Lufthansa and first half of 2011. The volume transported increased by 14.8 per ­Austrian Airlines. Furthermore, Lufthansa Cargo holds equity cent. Tonne-kilometres transported were up 14.3 per cent on last ­interests in sales support and handling companies. year. In conjunction with a 19.7 per cent rise in capacity, the load factor dropped by 3.3 percentage points to 69.1 per cent (see also Since 1 January 2011 Karl Ulrich Garnadt has been Chairman the table on p. 17 ). of the Executive Board and CEO of Lufthansa Cargo AG. Dr Karl-Rudolf Rupprecht was appointed to the Executive Board The volume transported within Europe rose by 13.4 per cent. of Lufthansa Cargo on 1 April 2011. He is responsible for Ope­ This volume growth stemmed mainly from shuttle services for the rations and succeeds Karl-Heinz Köpfle, who has retired after Americas and Asia/Pacific traffic regions. 42 years with the Lufthansa Group. Prior to this appointment, Dr Rupprecht was in charge of the Frankfurt hub management The largest volume growth of 19.5 per cent was once again seen at Lufthansa Passenger Airlines. in the Americas. This development was driven primarily by traffic towards the Americas, South America in particular. Product and route network The first half of 2011 was hall- marked by a significant, structural increase in capacity compared With an increase of 12.5 per cent, volume growth in the Asia/Pacific with the first half-year 2010. This additional capacity came mainly region was slightly below average. This is attributable to Japan’s from the MD11 cargo aircraft reactivated following the crisis, the sluggish recovery following the environmental disasters there and 777 freighters delivered to AeroLogic in the course of last year and slower growth in export volumes from China. In addition, the load Austrian Airlines’ capacity, which has been integrated since July factor was impaired by significant increases in capacity among the 2010. Lufthansa Cargo’s focus was on the flexible, demand-orien- competitors, especially in China. tated management of both its capacity and the route network. ­

16 Lufthansa 2nd Interim Report January – June 2011 To our shareholders Interim management report | Interim financial statements | Further information Logistics

In the Middle East/Africa traffic region, cargo tonnage rose by Depreciation and amortisation was 25.0 per cent lower than the pre- 11.0 per cent compared with the first half of 2010. vious year at EUR 45m. This was due above all to the end of the depreciation period in 2010 for the cargo aircraft purchased in 1998. Revenue and earnings development Lufthansa Cargo’s reve- nue rose by 17.1 per cent to EUR 1.5bn in the reporting period. Other operating expenses were 8.0 per cent up on the year at Traffic revenue was chiefly responsible for this growth, up 17.6 per EUR 148m. This stems from higher travel expenses, Group cent on the first half of 2010 at EUR 1.4bn. ­services, rental and maintenance expenses, and write-downs on receivables. Other revenue came to EUR 64m (+ 8.5 per cent) and consisted largely of income from ad hoc aircraft chartering and freight Lufthansa Cargo posted an operating result of EUR 133m in the ­handling. first half of 2011 (previous year: EUR 144m), thus falling just short of the record result generated in 2010. Other operating income was 14.3 per cent down on the year at EUR 36m. The subsidiaries accounted for using the equity method contributed earnings of EUR 7m (previous year: EUR 10m). By contrast, the Total operating income therefore climbed to EUR 1.5bn overall. accrued losses at Jade Cargo International Ltd. were realised in That is a rise of 16.2 per cent. connection with an equity investment, meaning the equity result fell to EUR 0m (previous year: EUR 10m). There was nothing nota- Operating expenses rose by 19.1 per cent to EUR 1.4bn in the ble about the other segment income and expenses, which resulted period under review. on balance in net income of EUR 4m (previous year: EUR 2m).

This increase was largely driven by the higher cost of materials The segment result for the first half was EUR 137m, compared and services, which were up 26.1 per cent at EUR 1.0bn. Fuel with EUR 156m in the previous year. expenses rose by EUR 87m to EUR 249m as a result of escalat- ing kerosene prices. Meanwhile, fees and charges climbed Segment capital expenditure soared to EUR 35m (previous year: by 21.4 per cent to EUR 153m, primarily due to larger volumes. EUR 4m) and related principally to the above-mentioned equity Charter expenses went up by 19.8 per cent to EUR 532m in investment at Jade and investments in operating and office ­conjunction with higher costs for belly capacities. MRO expenses ­equipment. also increased because greater use of the fleet prompted more frequent maintenance inspections. They were up 9.1 per cent at Forecast After a good first half, Lufthansa Cargo remains optimis- EUR 60m. tic for the full year 2011. The company expects to see a stable development in demand, which will lead to good sales growth and Staff costs rose by 8.7 per cent compared with last year to EUR rising revenue. Lufthansa Cargo remains confident that it can 175m as reduced working hours were ended and performance- ­generate a substantially positive operating result in 2011. However, related bonuses increased. Pilot capacities were expanded follow- as the record result posted for 2010 was due in large measure ing the reactivation of laid-up aircraft. The segment employed a to catch-up effects following the global economic crisis, it cannot total of 4,524 people in the first half-year (+ 2.7 per cent). be expected to reach the figures of last year’s levels again.

Trends in traffic regions Lufthansa Cargo

Net traffic revenue Freight /mail Available cargo tonne- Revenue cargo tonne- Cargo load factor in €m external revenue * in thousand tonnes kilometres in millions kilometres in millions in % Jan. – June Change Jan. – June Change Jan. – June Change Jan. – June Change Jan. – June Change 2011 in % 2011 in % 2011 in % 2011 in % 2011 in pts

Europe 123 30.9 318 13.4 420 17.4 191 14.4 45.5 – 1.2 America 533 37.4 290 19.5 2,802 22.0 2,004 17.2 71.5 – 3.0 Asia / Pacific 661 5.9 271 12.5 3,037 18.7 2,194 12.1 72.2 – 4.3 Middle East / Africa 113 1.8 74 11.0 643 16.3 378 12.5 58.8 – 1.9 Total 1,430 17.5 953 14.8 6,902 19.7 4,768 14.3 69.1 – 3.2

* Excluding extra charter.

Lufthansa 2nd Interim Report January – June 2011 17 MRO business segment

Key figures MRO

Jan. – June Jan. – June Change April – June April – June Change 2011 2010 in % 2011 2010 in %

Revenue €m 2,047 1,974 3.7 1,020 975 4.6 of which with companies of the Lufthansa Group €m 881 802 9.9 436 389 12.1 Operating result €m 106 145 – 26.9 37 74 – 50.0 Segment result €m 131 164 – 20.1 53 86 – 38.4 EBITDA €m 201 178 12.9 81 80 1.3 Segment capital expenditure €m 51 28 82.1 36 13 176.9 Employees as of 30.6. number 19,584 20,270 – 3.4 19,584 20,270 – 3.4

Course of business Although global demand for maintenance, Lufthansa Technik Philippines, a joint venture between Lufthansa repair and overhaul (MRO) services is growing once more in a Technik and MacroAsia, is also investing in the construction of a number of regions, it is recovering at a slower rate than the pas- new maintenance and overhaul hangar for wide-bodied aircraft in senger and cargo business. The Middle East, North Africa and Manila. It will have room for one long-haul or two medium-haul Japan are all important markets for Lufthansa Technik, and the ­aircraft and is due to be completed in 2012. consequences of the political unrest and natural disasters there are prompting revenue to slump and delaying contract nego­ Products Lufthansa Technik is the world market leader in the field tiations. Cost pressure on airlines, aggressive new players and of civil aircraft, with a portfolio ranging from the total technical ­growing MRO capacities around the world mean that margin ­support of whole customer fleets to individual completion program­ ­pressure in the MRO business has risen further. The volume and mes for VIP aircraft. It was named “Best MRO Provider in Europe” structure of additional business reflect this trend. earlier this year.

Despite the challenges posed by the market and the competition, As well as installing the new Europa cabin – which entails over- Lufthansa Technik grew its revenue vis-à-vis 2010 in the first half of hauling 167 aircraft from throughout the Lufthansa short-haul fleet the year. However, it was unable to match the previous year’s very at various sites in Europe – Lufthansa Technik is supporting the good operating result. Provisions and revenue losses associated product innovations launched by Lufthansa Passenger Airlines, such with clients from the crisis-hit parts of North Africa had a severe as the First Class product for the intercontinental fleet andFlyNet. ­ impact on the result. Against this backdrop, Lufthansa Technik is working on a number of projects to further improve its cost base Intensive preparations are currently under way at Lufthansa Technik and its competitive position. The company is also preparing to roll out products for new aircraft types, such as the Boeing B787, to enter into new aircraft models to serve additional markets and B747-8i and Airbus A320neo. In the field of completion, several customers.­ B747-8i VIP refits will be conducted over the coming years. One contract has already been signed; others are in the pipeline. Segment structure The Lufthansa Technik group includes The maintenance division is also preparing for the launch of the 32 technical maintenance operations around the world, including Boeing B747-8i at Lufthansa Passenger Airlines next year. The the main site. Lufthansa Technik holds direct and ­indirect stakes Boeing B787 market launch will also take place very soon when in 56 companies, of which 23 are in Germany, 15 in other parts of the first aircraft is delivered to the Japanese airline ANA. The Europe, ten in America, and eight in Asia and Australia. There ­segment also plans to start supplying components for the new were no changes in Lufthansa Technik’s group of conso­lidated models this year; negotiations will soon be concluded with poten- companies compared with 2010. tial clients and component manufacturers. On top of all this, the engines division will expand its portfolio to include the new engine Lufthansa Technik is expanding its market presence further with used in the Airbus A320neo, which will commence operations in the construction of a new hangar for the maintenance of short and 2015. This means that all of Lufthansa Technik’s divisions are very medium-haul aircraft at the future Berlin Brandenburg International well prepared for the new aircraft models. Airport.

18 Lufthansa 2nd Interim Report January – June 2011 To our shareholders Interim management report | Interim financial statements | Further information MRO

Operating performance In the first six months, Lufthansa Operating expenses increased by 6.7 per cent to EUR 2.1bn. ­Technik succeeded in securing almost 200 new contracts with a This rise was driven in part by higher expenses for materials and total volume of EUR 345m for the full year 2011. This meant it external services (+ 9.0 per cent) for aircraft idle time and engine expanded its customer base and also serviced more aircraft and maintenance in conjunction with revenue growth. engines than in 2010. Due to a rise in pension provisions and one-off expenses at Lufthansa Technik was able to close important new contracts, ­several subsidiaries, staff costs edged up by 1.3 per cent to such as a total technical support agreement with Fly EUR 553m. The average number of employees fell by 721 to to maintain and overhaul the entire fleet, a contract with Virgin 19,710 in the first six months. The workforce was particularly Atlantic to overhaul the landing gear on its Airbus A340-300 fleet, reduced at plants – such as Hawker Pacific, Lufthansa Technik and an agreement to supply components for the LAN Airlines Switzerland or Shannon Aerospace – currently carrying out restruc­ ­ Bombardier Q400 and Boeing B737 fleets. The company also turing programmes to ensure their long-term competitiveness. signed contracts with Thai Airways for cabin modifications and with a VIP client for an Airbus A319 completion project. JetBlue Depreciation and amortisation was down 4.3 per cent at EUR 44m. will also have some of its Embraer fleet’s engines serviced at Other operating expenses rose by 10.1 per cent to EUR 403m. the Lufthansa Technik site in Alzey. This was primarily attributable to the increase in provisions for long-term engine contracts. A large number of clients have also extended or expanded their contracts, such as bmi. Under this agreement, Lufthansa Technik In total, Lufthansa Technik posted an operating result of EUR 106m will overhaul the airline’s entire Airbus and Boeing fleet at sites in for the first half of 2011, meaning it was unable to match the previ- Ireland, Bulgaria and Malta, and provide bmi with partner services ous year’s very good result (EUR 145m). for maintenance at London Heathrow Airport. The company will also service the whole Spanair fleet’s landing gear, thrust reversers At EUR 11m, the result of investments accounted for using the and auxiliary power units by 2019. equity method was up slightly on last year (EUR +1m). Thanks to higher other segment income, up EUR 5m to EUR 14m, Lufthansa On 29 June, ownership of the second Airbus A340-300 was Technik posted a segment result of EUR 131m (previous year: ­transferred on schedule to the German Federal Office of Defence EUR 164m). Technology. This followed a complete overhaul of the plane by Lufthansa Technik, which also included installing a VIP cabin. The Compared with the previous year (EUR 28m), the segment’s aircraft is due to be delivered to the client following a C check in ­capital expenditure soared to EUR 51m. Important items of capital the second half of 2011. expenditure were the purchase of reserve engines and the pro- curement of a Pratt & Whitney licence at Lufthansa Technik Aero Revenue and earnings development Lufthansa Technik’s reve- Alzey. Equity of EUR 3.8m was provided for Lufthansa Technik nue from Group companies rose by 9.9 per cent to EUR 881m. and the newly established joint venture with Panasonic IDAIR. This was mainly thanks to more modification programmes, such as the new Europa cabin and the new First Class for Lufthansa Forecast Lufthansa Technik expects to post an increase in revenue Passenger Airlines, along with new engine contracts with various and a substantial operating profit for the full year 2011. Even so, Group companies. At EUR 1.2bn, external revenue was down the segment will be unable to match last year’s result, considering marginally on the previous year (0.5 per cent). This was because the above-mentioned negative factors in the first half year. However, revenue growth in engine and component servicing was eclipsed steps have been taken to ensure that the operating result improves by slower customer business at a number of subsidiaries and again in the second half of 2011 and in 2012. These include strict the negative impact of the dollar’s performance. Revenue climbed cost and efficiency management measures as part of a new pro- by 3.7 per cent overall and totalled EUR 2.0bn. gramme to safeguard earnings at Lufthansa Technik, the focussed further development of the sites and the simultaneous use of cost Other operating income went up by EUR 17m to EUR 111m, largely synergies. due to exchange-rate movements relating to the reporting date. By rolling out products for new aircraft models and technologies All in all, the MRO segment reported operating income of EUR at an early stage, Lufthansa Technik is also in a good position to 2.2bn (+ 4.4 per cent). participate in the further growth of the MRO industry and thereby secure the company’s long-term prospects.

Lufthansa 2nd Interim Report January – June 2011 19 IT Services business segment

Key figures IT Services

Jan. – June Jan. – June Change April – June April – June Change 2011 2010 in % 2011 2010 in %

Revenue €m 289 291 – 0.7 142 148 – 4.1 of which with companies of the Lufthansa Group €m 179 174 2.9 89 90 – 1.1 Operating result €m 6 8 – 25.0 3 5 – 40.0 Segment result €m 4 7 – 42.9 1 4 – 75.0 EBITDA €m 22 24 – 8.3 11 13 – 15.4 Segment capital expenditure €m 16 16 0.0 9 8 12.5 Employees as of 30.6. number 2,870 2,991 – 4.0 2,870 2,991 – 4.0

Course of business Although the business climate remained The Jetzt! programme launched in 2010 continued throughout difficult, held its ground in the period under the reporting period with the aim to realign the company. After five review. Revenue was on a par with last year. However, the first-half individual companies were merged into Lufthansa Systems AG in result fell somewhat short of the 2010 figure. This was due pri- March, a settlement of interests and a social redundancy scheme marily to higher restructuring costs. were agreed at the end of June, paving the way to initiate the ­reorganisation. Segment structure Lufthansa Systems offers solutions for all business processes in the airline sector as well as consultancy Revenue and earnings development Lufthansa Systems gener- and IT services for selected industries such as transport and logis- ated revenue of EUR 289m in the first half-year (previous year: tics, industry, energy, media and publishing, and the healthcare EUR 291m). The revenue with Lufthansa Group companies rose sector. Lufthansa Systems has several offices in Germany and now by EUR 5m to EUR 179m. As a result of portfolio adjustment, also has overseas sites in 16 countries after opening additional ­revenue with external clients dropped by EUR 7m to EUR 110m. offices in London and Dubai. Other operating income shrank to EUR 11m (previous year: EUR 16m). Total operating income therefore decreased by Products Lufthansa Systems constantly adds innovative new EUR 7m to EUR 300m. developments to its portfolio. With BoardConnect, Lufthansa ­Systems presented the world’s first wireless in-flight entertainment Total operating expenses were down 1.7 per cent at EUR 294m system at the beginning of this year. In addition to this, the com- although the cost of materials and services remained stable year pany has launched Lido/iRouteManual, a fully featured solution on year at EUR 39m. The average monthly headcount declined by for navigation charts based on an app for tablet computers. 4.2 per cent to 2,875 employees. Accordingly, staff costs dropped Another innovation is the NetLine/Hub solution, which enables to EUR 116m (previous year: EUR 120m). Depreciation was stable ­airlines to operate more efficiently at their hubs. year on year at EUR 16m. Other operating expenses amounted to EUR 123m (previous year: EUR 124m). Operating performance A number of new clients chose ­solutions from Lufthansa Systems in the first half of the year. For The operating result for Lufthansa Systems sank to EUR 6m (previ- instance, Thomas Cook hired the company to operate its Europe- ous year: EUR 8m). The effects of adjusting the industry portfolio wide IT infrastructure. Lufthansa Passenger Airlines extended a had an adverse effect on the segment result, which fell by EUR 3m number of key contracts. Lufthansa Systems also secured a major to EUR 4m. As in 2010, segment capital expenditure came to contract to take over the Malaysia Airlines global data network, EUR 16m. thereby strengthening its position in Asia. Condor became the first client to choose BoardConnect. In the field of logistics, Lufthansa Forecast Lufthansa Systems will be reorganised in the third Systems ramped up its collaboration with Hamburg Süd, Schenker quarter of 2011 as part of the Jetzt! programme. The programme Deutsch­land and the Hamburg Port Authority. Volkswagen also aims to give the company a clear, customer-orientated alignment, commissioned the segment with the introduction of a new com- create a much simpler structure, strengthen sales and reduce pany portal.­ the costs involved in cross-divisional functions. These steps will help the segment to generate an operating result which exceeds last year’s, despite a slight fall in revenue being anticipated.

20 Lufthansa 2nd Interim Report January – June 2011 To our shareholders Interim management report | Interim financial statements | Further information IT Services Catering

Catering business segment

Key figures Catering

Jan. – June Jan. – June Change April – June April – June Change 2011 2010 in % 2011 2010 in %

Revenue €m 1,089 1,056 3.1 569 563 1.1 of which with companies of the Lufthansa Group €m 270 257 5.1 144 135 6.7 Operating result €m 21 13 61.5 19 15 26.7 Segment result €m 25 20 25.0 21 20 5.0 EBITDA €m 59 152 – 61.2 32 97 – 67.0 Segment capital expenditure €m 30 17 76.5 16 8 100.0 Employees as of 30.6. number 29,210 28,264 3.3 29,210 28,264 3.3

Course of business In spite of the burdening factors, passenger External revenue amounted to EUR 819m (+ 2.5 per cent), while figures developed positively overall in the first half of 2011. As a internal revenue with Lufthansa Group companies climbed to result, LSG Sky Chefs was also able to post revenue growth and EUR 270m (+ 5.1 per cent). Other operating income dropped by significantly boost its operating profits for the first-half year on year. EUR 14m to EUR 25m, mainly due to lower exchange rate gains. Total operating income went up by 1.7 per cent to EUR 1.1bn Segment structure The LSG Sky Chefs group consists of ­altogether. 136 companies with approximately 200 sites in 50 countries. The parent company for the group, LSG Lufthansa Service Also coming in at EUR 1.1bn, total operating expenses were Holding AG, is based in Neu-Isenburg. Compared with the first 1.0 per cent up on the previous year. The cost of materials and half of last year, the group of consolidated companies grew services increased by 3.2 per cent to EUR 481m. On average, by five firms. Since 1 January 2011, Erdmann Rauer serves as LSG Sky Chefs employed a workforce of 28,847 in the first Chief Sales Officer on the Executive Board. six months (+1.9 per cent). Staff costs nevertheless remained unchan­ged at EUR 395m. Depreciation and amortisation totalled Products The lightweight “Quantum” trolley developed by LSG EUR 28m. This was 9.7 per cent less than in the previous year. Sky Chefs is gradually being introduced on all long-haul services Other opera­ting expenses remained virtually unchanged at operated by Lufthansa Passenger Airlines and will enable a reduc- EUR 189m (– 0.5 per cent). tion in annual fuel consumption of about 9,000 tonnes. LSG Sky Chefs has also started producing and marketing tailor-made meal LSG Sky Chefs posted an operating profit of EUR 21m for the first boxes in Europe, having already successfully introduced them in six months of 2011. This is EUR 8m higher than last year’s figure North America. and reflects both higher income and the successful implementation of cost management projects. At EUR – 2m, the balance of other Operating performance LSG Sky Chefs attracted a number of segment income and expenses was lower than the previous year’s new clients in the first half of 2011. In addition to this, the company’s figure of EUR 1m. However, the result of the equity valuation was contracts with United Airlines, TAM and Germanwings were success- stable year-on-year at EUR 6m. The segment result was therefore fully extended. The joint venture with Nanjing Airport was prolonged ultimately EUR 25m (previous year: EUR 20m). Segment capital until 2026. Since June, LSG Sky Chefs has once again been expenditure was EUR 13m above last year’s at EUR 30m. While ­present at Chicago Airport. In May, the company launched a joint investments in 2010 were kept to a minimum as part of the activities venture with First Catering Schweiz AG. The initiative Upgradeplus to safeguard earnings, LSG Sky Chefs has now started investing is also still progressing successfully. In the second quarter, the in expanding its business again. pilot phase of the programme to realign production processes was concluded and implementation began at the company’s 25 Forecast As regards passenger numbers, the prospects for the most important strategic sites. aviation industry in the second half of 2011 are cautiously optimistic. LSG Sky Chefs therefore expects revenue to keep rising in the Revenue and earnings development Revenue for the Catering future and still anticipates a year-on-year improvement in its oper- segment continued to develop positively in the first half-year. ating profits for 2011 as a whole. ­Compared with the previous year, it rose by 3.1 per cent (adjusted for exchange rates: + 5.7 per cent) to EUR 1.1bn. This development is largely attributable to higher passenger numbers.

Lufthansa 2nd Interim Report January – June 2011 21 Other Risk and opportunities report

Lufthansa is an international aviation company and therefore Other exposed to macroeconomic, sector-specific and Company risks. Jan. – June Jan. – June Change These are primarily market and competition risks which affect 2011 2010 in % capacity and load factors. They are flanked by political risks, oper- Total operating income €m 650 705 – 7.8 ational and collective bargaining risks, legal risks and contingen- Operating result €m 0 – 129 100.0 cies, procurement risks, IT risks and financial and treasury risks. Segment result €m 8 – 107 EBITDA €m 69 275 – 74.9 However, our permanently updated management systems make Segment capital expenditure €m 12 7 71.4 it possible to identify both risks and opportunities at an early stage Employees as of 30.6. number 3,873 3,690 5.0 and to act accordingly. For detailed information on the opportunity and risk management system and the Group’s risk situation, please Structure The segment Other includes the service and financial see the Annual Report 2010 from p. 132 . companies which incorporate the Lufthansa Group’s financial and service activities. They include AirPlus, Lufthansa Flight Training In the first half of 2011 the opportunities and risks for the Group and Lufthansa Commercial Holding. The central Group functions described in detail in the Annual Report 2010 have become more of Deutsche Lufthansa AG are also assigned to this segment. concrete or developed as follows:

Companies’ performance The international business travel The global economic upswing is still being largely sustained by the markets continued to develop positively in the first half of 2011. momentum in the emerging markets. However, further economic As a consequence, AirPlus billed 20 per cent more flights world- developments are surrounded by a great deal of uncertainty. In the wide than in the same period in 2010. Billing revenue was 23 per Euro area, it also depends on the debt crisis at various member cent higher than a year ago. Due to lower foreign exchange gains, countries being resolved. In the aviation industry, global capacity total income was 19.7 per cent down on last year, coming in at is exceeding demand again for the first time. Although Lufthansa is EUR 159m. However, AirPlus grew its operating result by EUR 6m in a position to be able to sell most of the capacity that has increased to EUR 18m. since last year, there is still immense price pressure in the current competitive environment, especially in European traffic. Developments at Lufthansa Flight Training were also pleasing. Simulator training made the largest contribution to this, with higher The political situation in the Arab world remains equally tense, which capacity utilisation than in the previous year. The company also is also reflected in traffic developments. This particularly affects enjoyed higher demand from Lufthansa Passenger Airlines for basic Austrian Airlines and bmi as a result of their route structures, and flight attendant training courses. Lufthansa Flight Training raised they have had to adjust capacities. The disaster situation in Japan its revenue contribution to EUR 90m (+13.9 per cent). The operat- is also ongoing. In operational terms, the flight programmes of ing result came in at EUR 21m (previous year: EUR 16m). all companies in the Group have been adjusted in line with the change in demand. In the first half-year, developments in Group functions continued to be shaped by changes in exchange rates. The net result of Fuel prices have stabilised at a high level as further global economic exchange rate movements here was positive, as in the first quarter. developments remain dogged by uncertainty. Thanks to its proven This enabled the Group functions to improve their contribution hedging policy, the Lufthansa Group has not yet felt the full effect towards the operating result – despite a 7.6 per cent fall in total of these on earnings. However, as the market remains highly com- income to EUR 379m – to EUR – 46m (previous year: EUR – 162m). petitive, it is unlikely that the additional costs can be recouped in full from customers. Revenue and earnings development The segment Other gen- erated total operating income of EUR 650m in the first half of 2011 Altogether, however, and even considering the particular macro­ (– 7.8 per cent). Operating expenses fell by 22.1 per cent – due economic situation and all other known issues and circumstances, primarily to exchange rates – and also came in at EUR 650m. This there are currently no identifiable developments which could meant the segment broke even in the first half of 2011 (previous endanger the Company’s continued existence. year: EUR – 129m). The segment result also improved substantially by EUR 115m to EUR 8m.

22 Lufthansa 2nd Interim Report January – June 2011 To our shareholders Interim management report | Interim financial statements | Further information Other Risk and opportunities report Supplementary report Forecast

Supplementary report Further growth will also affect commodity prices. The oil price is expected to remain high, for example. Futures contracts for delivery Since 1 July 2011 no events of particular importance have in December 2011 are currently trading at around USD 112/barrel. occurred that the Lufthansa Group would expect to have a signifi- cant influence on its net assets, financial and earnings position. In the remainder of this year, the political unrest in the Middle East and the uncertain situation in Japan will continue to prompt uncer- tainty and volatility on the aviation market. Furthermore, the Forecast ­potential profits in the airline industry will be threatened by growing ­over­capacity on the market and substantially higher fuel prices. Against this backdrop, in June IATA once again cut its 2011 GDP development profit forecast for the global airline industry, this time from USD 2011* 2012* 2013* 2014* 2015* 8.6bn to USD 4.0bn. This means the profit projection has been in % halved since March and is much lower than it was last year, when World 3.3 4.0 4.0 4.2 4.2 profits of USD 18bn were generated. Europe 2.1 2.0 2.1 2.3 2.4 Germany 3.5 2.0 1.8 1.8 1.5 Lufthansa Group For Lufthansa, too, business developments North America 2.5 2.6 2.8 3.3 3.3 have been marked by sales growth to date, although this was South America 4.6 4.6 4.5 4.8 4.4 impaired by the negative impact of the above-mentioned crises Asia / Pacific 4.6 6.5 6.0 6.0 6.0 and the high oil price. These negative factors naturally also have China 9.4 8.5 8.9 8.8 8.5 an effect on the full-year result potential. Middle East 5.7 5.3 4.8 4.8 4.4 Africa 1.9 5.2 5.3 5.3 5.2 As the year progresses, we expect to see ongoing positive devel- Source: Global Insight World Overview as of 15.7.2011. opments in demand and sales, in which the growth rates in a * Forecast. number of business segments will continue to normalise. At the same time, we expect the climate in the crisis-hit regions – at least General economy and sector The global economic recovery in Japan – to recover further, which will have a positive effect on will continue in the light of ongoing dynamic developments in the Group’s revenue and earnings position. The Group will continue the emerging markets. However, considering the dampening to face challenges as a result of the high oil price and the ongoing ­factors, expectations regarding the rate of this growth have competitive pressure in many markets. However, the Group now been corrected downwards. Growth of 3.3 per cent is now ­companies are preparing to face these by adjusting capacity and anticipated, as opposed to the 3.7 per cent forecast at the taking steps to increase efficiency. New cost-cutting projects ­beginning of this year. have been implemented in several business segments, which will bear fruit later in the year. Where necessary, extensive restructur- The US economy is expected to grow 2.5 per cent on the year ing will also be used. – much less than was projected at the beginning of 2011. The Asian markets will also continue to grow strongly at around The business segments will be supported by the tried and tested 4.6 per cent year on year, although this represents a decline risk management system and the solid financial profile of the on the growth rates previously seen. According to the latest ­Lufthansa Group. ­estimates, the ­Japanese economy will shrink by 0.9 per cent in 2011 due to the impact of the disasters there. Experts expect Based on the improved result posted for the first half of the year the Chinese economy to expand by 9.4 per cent in 2011 and and the overall positive outlook for the remainder of 2011, we the Indian economy by 7.9 per cent. The economy in Europe can ­confirm our prognosis for the current financial year. Even after be expected to keep growing moderately as the year progresses; ­taking the negative factors from the first six months into account, GDP is forecast to increase by 2.1 per cent compared with 2010. we continue to anticipate a year-on-year increase in our revenue Based on strong domestic demand twinned with rising employ- and operating result. ment levels and robust demand from abroad, the growth expecta- tions for the ­German economy have been raised to 3.5 per cent in the course of recent months.

Lufthansa 2nd Interim Report January – June 2011 23 Consolidated income statement January – June 2011

Jan. – June Jan. – June April – June April – June in €m 2011 2010 2011 2010

Traffic revenue 11,597 10,203 6,373 5,627 Other revenue 2,466 2,422 1,251 1,240 Total revenue 14,063 12,625 7,624 6,867

Changes in inventories and work performed by entity and capitalised 24 70 – 5 7 Other operating income 1,348 1,466 622 911 Cost of materials and services – 8,353 – 7,305 – 4,392 – 3,843 Staff costs – 3,393 – 3,193 – 1,700 – 1,636 Depreciation, amortisation and impairment – 836 – 798 – 419 – 395 Other operating expenses – 2,689 – 2,931 – 1,391 – 1,634 Profit / loss from operating activities 164 – 66 339 277

Result of equity investments accounted for using the equity method – 18 – 4 9 10 Result of other equity investments 35 26 22 18 Interest income 96 107 52 57 Interest expenses – 249 – 254 – 121 – 126 Other financial items – 309 108 80 65 Financial result – 445 – 17 42 24 Profit / loss before income taxes – 281 – 83 381 301

Income taxes 82 – 15 – 77 – 103 Profit / loss after income taxes – 199 – 98 304 198

Profit / loss attributable to minority interests – 7 – 6 – 3 – 4 Net profit / loss attributable to shareholders of Deutsche Lufthansa AG – 206 – 104 301 194

Basic earnings per share in € – 0.45 – 0.23 0.66 0.42 Diluted earnings per share in € – 0.45 – 0.23 0.66 0.42

24 Lufthansa 2nd Interim Report January – June 2011 To our shareholders | Interim management report Interim financial statements | Further information Consolidated income statement Statement of comprehensive income

Statement of comprehensive income January – June 2011

Jan. – June Jan. – June April – June April – June in €m 2011 2010 2011 2010

Profit / loss after income taxes – 199 – 98 304 198

Other comprehensive income Differences from currency translation 36 210 136 113 Subsequent measurement of available-for-sale financial assets – 65 362 30 – 153 Subsequent measurement of cash flow hedges – 13 655 – 535 292 Other comprehensive income from investments accounted for using the equity method 2 – 6 0 2 Other expenses and income recognised directly in equity – 6 24 0 7 Income taxes on items in other comprehensive income 25 – 174 112 – 79 Other comprehensive income after income taxes – 21 1,071 – 257 182

Total comprehensive income – 220 973 47 380 Comprehensive income attributable to minority interests – 1 – 13 – 3 – 10 Comprehensive income attributable to shareholders of Deutsche Lufthansa AG – 221 960 44 370

Lufthansa 2nd Interim Report January – June 2011 25 Consolidated balance sheet as of 30 June 2011

Assets in €m 30.6.2011 31.12.2010 30.6.2010

Intangible assets with an indefinite useful life * 1,580 1,582 1,581 Other intangible assets 338 329 334 Aircraft and reserve engines 11,771 11,153 10,790 Repairable spare parts for aircraft 853 877 866 Property, plant and other equipment 2,070 2,120 2,161 Investment property – – 3 Investments accounted for using the equity method 348 385 356 Other equity investments 1,052 1,128 1,008 Non-current securities 131 250 248 Loans and receivables 605 620 418 Derivative financial instruments 188 350 769 Deferred charges and prepaid expenses 23 26 29 Effective income tax receivables 62 61 71 Deferred claims for income tax rebates 67 82 28 Non-current assets 19,088 18,963 18,662

Inventories 625 662 665 Trade receivables and other receivables 4,221 3,401 4,084 Derivative financial instruments 615 484 402 Deferred charges and prepaid expenses 169 146 174 Effective income tax receivables 82 98 107 Securities 3,400 4,283 3,942 Cash and cash equivalents 1,232 1,097 1,424 Assets held for sale 85 186 72 Current assets 10,429 10,357 10,870

Total assets 29,517 29,320 29,532

* Including goodwill.

26 Lufthansa 2nd Interim Report January – June 2011 To our shareholders | Interim management report Interim financial statements | Further information Consolidated balance sheet

Shareholders’ equity and liabilities in €m 30.6.2011 31.12.2010 30.6.2010

Issued capital 1,172 1,172 1,172 Capital reserve 1,366 1,366 1,366 Retained earnings 3,800 2,944 2,955 Other neutral reserves 1,614 1,629 1,665 Net profit / loss – 206 1,131 – 104 Equity attributable to shareholders of Deutsche Lufthansa AG 7,746 8,242 7,054 Minority interests 88 98 108 Shareholders’ equity 7,834 8,340 7,162

Pension provisions 2,492 2,571 2,563 Other provisions 578 643 623 Borrowings 5,268 6,227 6,440 Other financial liabilities 112 110 95 Advance payments received, deferred income and other non-financial liabilities 1,129 1,087 1,047 Derivative financial instruments 324 111 24 Deferred income tax liabilities 225 405 796 Non-current provisions and liabilities 10,128 11,154 11,588

Other provisions 931 881 1,025 Borrowings 870 957 826 Trade payables and other financial liabilities 4,662 4,193 4,548 Liabilities from unused flight documents 3,651 2,389 3,110 Advance payments received, deferred income and other non-financial liabilities 1,118 1,066 1,041 Derivative financial instruments 224 103 50 Effective income tax obligations 99 237 182 Current provisions and liabilities 11,555 9,826 10,782

Total shareholders’ equity and liabilities 29,517 29,320 29,532

Lufthansa 2nd Interim Report January – June 2011 27 Consolidated statement of changes in shareholders’ equity as of 30 June 2011

Issued Capital Fair value Currency Reva- Other Total Retained Net pro- Equity Minority Total capital reserve measure- differ- luation neutral other earnings fit / loss attrib­- interests share­ ment of ences reserve reserves neutral ut­able to holders’ financial (due to reserves share­ equity instru- business holders of ments combi­ Deutsche nations) Lufthansa in €m AG

As of 31.12.2009 1,172 1,366 118 – 70 193 333 574 3,094 – 112 6,094 108 6,202 Changes in accounting policies – – 44 – – – 44 – 122 78 – – – Adjusted as of 31.12.2009 1,172 1,366 162 – 70 193 333 618 2,972 – 34 6,094 108 6,202

Capital increases / reductions – – – – – – – – – – – – Reclassifications – – – – – – 2 – 2 – 34 34 – 2 2 – Dividends to Lufthansa shareholders / minority interests – – – – – – – – – – – 13 – 13 Net profit / loss attributable to share- holders of Deutsche Lufthansa AG / attributable to minority interests – – – – – – – – – 104 – 104 6 – 98 Other expenses and income recognised directly in equity – – 843 210 – – 4 1,049 17 – 1,066 5 1,071 As of 30.6.2010 1,172 1,366 1,005 140 193 327 1,665 2,955 – 104 7,054 108 7,162

As of 31.12.2010 1,172 1,366 856 241 193 339 1,629 2,944 1,131 8,242 98 8,340 Capital increases / reductions – – – – – – – – – – – – Reclassifications – – – – – – – 856 – 856 – – – Dividends to Lufthansa shareholders / minority interests – – – – – – – – – 275 – 275 – 11 – 286 Net profit / loss attributable to share- holders of Deutsche Lufthansa AG / attributable to minority interests – – – – – – – – – 206 – 206 7 – 199 Other expenses and income recognised directly in equity – – – 53 36 – 2 – 15 – – – 15 – 6 – 21 As of 30.6.2011 1,172 1,366 803 277 193 341 1,614 3,800 – 206 7,746 88 7,834

28 Lufthansa 2nd Interim Report January – June 2011 To our shareholders | Interim management report Interim financial statements | Further information Consolidated statement of changes in shareholders’ equity Consolidated cash flow statement

Consolidated cash flow statement January – June 2011

Jan. – June Jan. – June April – June April – June in €m 2011 2010 2011 2010

Cash and cash equivalents 1.1. 1) 1,097 1,136 1,210 1,203

Net profit / loss before income taxes – 281 – 83 381 301 Depreciation, amortisation and impairment losses on non-current assets (net of reversals) 854 772 421 398 Depreciation and impairment losses on repairable spare parts for aircraft (net of reversals) – 2 – 15 – 12 – 20 Net proceeds from disposal of non-current assets – 34 – 184 – 21 – 180 Result of equity investments – 17 – 22 – 31 – 28 Net interest 153 147 69 69 Income tax payments / reimbursements – 172 – 37 – 36 – 28 Measurement of financial derivatives through profit and loss 288 – 122 – 83 – 77 Change in working capital 2) 951 964 273 421 Cash flow from operating activities 1,740 1,420 961 856

Capital expenditure for property, plant and equipment and intangible assets – 1,359 – 940 – 685 – 416 Capital expenditure for financial investments – 58 – 24 – – 18 Increase / decrease in repairable spare parts for aircraft 18 – 18 20 8 Proceeds from disposal of non-consolidated equity investments 1 109 – 107 Proceeds from disposal of consolidated equity investments – – – – Cash outflows for acquisitions of non-consolidated equity investments – 20 – 8 – 8 – 6 Cash outflows for acquisitions of consolidated equity investments – – 2 – – Proceeds from disposal of intangible assets, property, plant and equipment and other financial investments 287 261 95 99 Interest income 195 167 77 64 Dividends received 53 37 39 30 Net cash from / used in investing activities – 883 – 418 – 462 – 132 Purchase of securities / fund investments – 636 – 889 – 134 – 743 Disposal of securities / fund investments 1,298 194 511 – Net cash from / used in investing and cash management activities – 221 – 1,113 – 85 – 875

Capital increase – – – – Non-current borrowing 113 396 38 380 Repayment of non-current borrowing – 954 – 318 – 555 – 127 Other financial debt 8 20 1 – 1 Dividends paid – 286 – 13 – 278 – Interest paid – 269 – 148 – 86 – 38 Net cash from / used in financing activities – 1,388 – 63 – 880 214

Net increase / decrease in cash and cash equivalents 131 244 – 4 195 Changes due to currency translation differences 4 44 26 26 Cash and cash equivalents 30.6. 1,232 1,424 1,232 1,424 Securities 3,400 3,942 3,400 3,942 Total liquidity 4,632 5,366 4,632 5,366 Net increase / decrease in total liquidity – 748 927 – 534 952

1) Presented for the individual quarter, cash and cash equivalents as of 1 April. 2) Working capital consists of inventories, receivables, liabilities and provisions.

Lufthansa 2nd Interim Report January – June 2011 29 Notes applicable in the European Union (EU). This interim report as of 30 June 2011 has been prepared in condensed form in accordance with IAS 34. In preparing the interim financial 1)­ Standards applied and changes in the group ­statements the standards and interpretations applicable as of of consolidated companies 1 January 2011 have been applied. The standards and interpre­ The consolidated financial statements of Deutsche Lufthansa AG tations mandatory for the first time as of 1 January 2011 did not and its subsidiaries have been prepared in accordance with the have a significant effect on the Group’s net assets, financial and International Financial Reporting Standards (IFRS) issued by the earnings position. The changes to the group of consolidated International Accounting Standards Board (IASB), taking account ­companies also had no significant influence on the Group’s net of interpretations by the IFRS Interpretations Committee (IFRIC) as assets, financial and earnings position.

Changes in the group of consolidated companies in the period 1.7.2010 to 30.6.2011

Name, registered office Additions Disposals Reason

Passenger Airline Group segment Global Brand Management AG, Basel, Switzerland 15.11.10 Established Jour Leasing Co., Ltd., Tokyo, Japan 16.7.10 Established Lufthansa Leasing Austria GmbH & Co. OG Nr. 2, Salzburg, Austria 6.7.10 Established Lufthansa Leasing Austria GmbH & Co. OG Nr. 3, Salzburg, Austria 6.7.10 Established Lufthansa Leasing Austria GmbH & Co. OG Nr. 4, Salzburg, Austria 6.7.10 Established Lufthansa Leasing Austria GmbH & Co. OG Nr. 5, Salzburg, Austria 6.7.10 Established Lufthansa Leasing Austria GmbH & Co. OG Nr. 6, Salzburg, Austria 6.7.10 Established Lufthansa Leasing Austria GmbH & Co. OG Nr. 7, Salzburg, Austria 6.7.10 Established Lufthansa Leasing Austria GmbH & Co. OG Nr. 8, Salzburg, Austria 6.7.10 Established Lufthansa Leasing Austria GmbH & Co. OG Nr. 9, Salzburg, Austria 6.7.10 Established Lufthansa Leasing Austria GmbH & Co. OG Nr. 10, Salzburg, Austria 6.7.10 Established Lufthansa Leasing Austria GmbH & Co. OG Nr. 11, Salzburg, Austria 24.3.11 Established Lufthansa Leasing Austria GmbH & Co. OG Nr. 12, Salzburg, Austria 24.3.11 Established Lufthansa Leasing Austria GmbH & Co. OG Nr. 14, Salzburg, Austria 24.3.11 Established GOAL Verwaltungsgesellschaft mbH & Co. Projekt Nr. 5 KG, Grünwald, Germany 31.12.10 Liquidation Lufthansa Leasing GmbH & Co. Fox-Bravo oHG, Grünwald, Germany 15.7.10 Liquidation Lufthansa Leasing GmbH & Co. Fox-Charlie oHG, Grünwald, Germany 15.7.10 Liquidation Lufthansa Leasing GmbH & Co. Fox-Quebec oHG, Grünwald, Germany 1.1.11 Abandonment of a business purpose Lufthansa Leasing GmbH & Co. Fox-Romeo oHG, Grünwald, Germany 1.1.11 Abandonment of a business purpose Lufthansa Leasing GmbH & Co. Fox-Sierra oHG, Grünwald, Germany 1.1.11 Abandonment of a business purpose Lufthansa Leasing GmbH & Co. Fox-Tango oHG, Grünwald, Germany 1.1.11 Abandonment of a business purpose Lufthansa Leasing GmbH & Co. Fox-Uniform oHG, Grünwald, Germany 1.1.11 Abandonment of a business purpose Lufthansa Leasing GmbH & Co. Fox-Victor oHG, Grünwald, Germany 1.1.11 Abandonment of a business purpose Lufthansa Leasing GmbH & Co. Fox-Yankee oHG, Grünwald, Germany 1.1.11 Abandonment of a business purpose Lufthansa Leasing GmbH & Co. Golf-Lima oHG, Grünwald, Germany 1.1.11 Abandonment of a business purpose Lufthansa Leasing GmbH & Co. Golf-Mike oHG, Grünwald, Germany 1.1.11 Abandonment of a business purpose

Segment IT Services Lufthansa Systems Aeronautics GmbH, Raunheim, Germany 24.3.11 Merger Lufthansa Systems Airline Services GmbH, Kelsterbach, Germany 24.3.11 Merger Lufthansa Systems Berlin GmbH, Berlin, Germany 24.3.11 Merger Lufthansa Systems Infratec GmbH Kelsterbach, Germany 24.3.11 Merger Lufthansa Systems Passenger Services GmbH, Kelsterbach, Germany 24.3.11 Merger

30 Lufthansa 2nd Interim Report January – June 2011 To our shareholders | Interim management report Interim financial statements | Further information Notes

Changes in the group of consolidated companies in the period 1.7.2010 to 30.6.2011

Name, registered office Additions Disposals Reason

Segment Catering Charm Food Service Co. Ltd., Incheon, South Korea 1.1.11 Established LSG Sky Chefs – First Catering Schweiz AG, Basserdorf, Switzerland 24.5.11 Established LSG Sky Chefs Argentina S.A., Buenos Aires, Argentina 1.6.11 Consolidated for the first time Oakfield Farms Solutions Europe Ltd., Feltham, Great Britain 1.4.11 Consolidated for the first time Starfood Antalya Gida Sanayi ve Ticaret A.S., Istanbul, Turkey 10.8.10 Established

Assets held for sale

Group Financial Group 30.6.2011 statements 30.6.2010 in €m 31.12.2010

Assets Aircraft and reserve engines 73 184 72 Financial assets 9 2 – Other assets 3 – –

Equity / liabilities associated with assets held for sale Shareholders’ equity – – – Liabilities – – –

2) Notes to the income statement, balance sheet, 3) Seasonality cash flow statement and segment reporting The Group’s business is mainly exposed to seasonal effects via Detailed comments on the income statement, the balance sheet, the Passenger Airline Group segment. As such, revenue in the first the cash flow statement and the segment reporting can be found and fourth quarters is generally lower as people travel less, while in the management report on p. 3 – 23 . higher revenue and operating profits are normally earned in the second and third quarters.

Lufthansa 2nd Interim Report January – June 2011 31 4) Contingencies and events after the balance sheet date 5) Earnings per share Several provisions could not be made because an outflow of resources was not sufficiently probable. The potential financial effect of these provisions on the result would have been EUR 208m for subsequent years. As of the year-end 2010 reporting 30.6.2011 30.6.2010 date the figure came to EUR 210m. Basic earnings per share € – 0.45 – 0.23 Consolidated net profit / loss €m – 206 – 104 Contracts signed at the end of 2010 for the sale of four Canadair Weighted average number of shares 457,937,567 457,937,572 Regional Jet 200s resulted in profits in the first half of 2011 of EUR 2m and cash inflows of EUR 11m. Signed contracts for the Diluted earnings per share € – 0.45 – 0.23 sale of four Canadair Regional Jet 200s and two ATR 42-500s are Consolidated net profit / loss €m – 206 – 104 expected to give rise to cash inflows of EUR 14m by the end of + interest expenses on the convertible bonds €m 0 0 2011 and EUR 3m by the end of 2012. At the end of June 2011, – current and deferred taxes €m 0 0 there were order commitments of EUR 6.2bn for capital expendi- Adjusted net profit / loss for the period €m – 206 – 104 ture on property, plant and equipment and intangible assets. Weighted average number of shares 458,273,971 458,273,976 As of 31 December 2010, the order commitments came to EUR 6.8bn. 6) Issued capital A resolution passed at the Annual General Meeting on 24 April Contingent liabilities 2009 authorised the Executive Board until 23 April 2014, subject in €m 30.6.2011 31.12.2010 to approval by the Supervisory Board, to increase the Company’s

From guarantees, bills of exchange issued capital by up to EUR 25m by issuing new registered and cheque guarantees 829 883 shares to employees for payment in cash. The new shares are to From warranty contracts 951 960 be offered for sale solely to employees of Deutsche Lufthansa AG From providing collateral and its affiliated companies. Existing shareholders’ subscription for third-party liabilities 37 14 rights are excluded. Following a resolution of the Annual General Meeting held on 3 May 2011 the distributable profit of EUR 275m We refer to the comments on p. 23 ­of the management report for shown in the financial statements for Deutsche Lufthansa AG for events after the balance sheet date. 2010 was paid out as dividends. This corresponds to a dividend of EUR 0.60 per share for the financial year 2010.

32 Lufthansa 2nd Interim Report January – June 2011 To our shareholders | Interim management report Interim financial statements | Further information Notes

7) Segment reporting

Segment information by operating segment January – June 2011

Passenger Logistics MRO IT Services Catering Total Other Reconciliation Group ­Airline reportable ­Group operating in €m segments

External revenue 10,478 1,490 1,166 110 819 14,063 – – 14,063 of which traffic revenue 9,949 1,431 – – – 11,380 – 217 11,597 Inter-segment revenue 373 13 881 179 270 1,716 – – 1,716 Total revenue 10,851 1,503 2,047 289 1,089 15,779 – – 1,716 14,063

Other operating income 639 36 111 11 25 822 650 – 348 1,124 Total operating income 11,490 1,539 2,158 300 1,114 16,601 650 – 2,064 15,187 Operating expenses 11,729 1,406 2,052 294 1,093 16,574 650 – 2,040 15,184 of which cost of materials and services 7,292 1,038 1,052 39 481 9,902 44 – 1,593 8,353 of which staff costs 2,002 175 553 116 395 3,241 138 – 7 3,372 of which depreciation and amortisation 670 45 44 16 28 803 22 4 829 of which other operating expenses 1,765 148 403 123 189 2,628 446 – 444 2,630 Operating result 1) – 239 133 106 6 21 27 0 – 24 3

Other segment income 67 5 14 0 * 0 * 86 27 135 248 Other segment expenses 41 1 0 * 2 2 46 19 22 87 of which impairment losses 17 0 * – – 0 * 17 – – 17 Result of investments accounted for using the equity method – 35 0 * 11 – 6 – 18 0 * – – 18 Segment result 2) – 248 137 131 4 25 49 8 89 146

Other financial result – 427 Profit / loss before income taxes – 281 Segment assets 3) 15,874 802 2,944 227 1,202 21,049 1,727 6,741 29,517 of which from investments accounted for using the equity method 78 40 156 0 68 342 6 – 348 Segment liabilities 4) 11,083 453 1,263 196 461 13,456 1,584 6,643 21,683 Segment capital expenditure 5) 1,250 35 51 16 30 1,382 12 43 1,437 of which on investments accounted for using the equity method – 8 1 – – 9 0 * – 9 Employees on balance sheet date 58,687 4,542 19,584 2,870 29,210 114,893 3,873 – 118,766

* Rounded below EUR 1m. 1) See page 7 of the interim management report for reconciliation between operating result and profit from operating activities. 2) Profit from operating activities including result of investments shown at equity. 3) Intangible assets, property, plant and equipment, investments accounted for using the equity method, inventories, trade receivables and other assets constitute assets. Under the heading “Group” all assets are shown. 4) All liabilities with the exception of financial debt, liabilities to Group companies, derivative financial instruments, other deferred income and tax obligations. Under the heading “Group” all liabilities are shown. 5) Capital expenditure for intangible assets, property, plant and equipment, and investments accounted for using the equity method.

Lufthansa 2nd Interim Report January – June 2011 33 Segment information by operating segment January – June 2010

Passenger Logistics MRO IT Services Catering Total Other Reconciliation Group ­Airline reportable ­Group operating in €m segments

External revenue 9,266 1,271 1,172 117 799 12,625 – – 12,625 of which traffic revenue 8,742 1,217 – – – 9,959 – 244 10,203 Inter-segment revenue 301 12 802 174 257 1,546 – – 1,546 Total revenue 9,567 1,283 1,974 291 1,056 14,171 – – 1,546 12,625

Other operating income 663 42 94 16 39 854 705 – 347 1,212 Total operating income 10,230 1,325 2,068 307 1,095 15,025 705 – 1,893 13,837 Operating expenses 10,572 1,181 1,923 299 1,082 15,057 834 – 1,883 14,008 of which cost of materials and services 6,361 823 965 39 466 8,654 46 – 1,395 7,305 of which staff costs 1,844 161 546 120 395 3,066 131 – 2 3,195 of which depreciation and amortisation 611 60 46 16 31 764 21 6 791 of which other operating expenses 1,756 137 366 124 190 2,573 636 – 492 2,717 Operating result 1) – 342 144 145 8 13 – 32 – 129 – 10 – 171

Other segment income 75 2 9 0 * 2 88 25 211 324 Other segment expenses 11 0 * 0 * 1 1 13 3 203 219 of which impairment losses 7 – – – 0 * 7 – – 7 Result of investments accounted for using the equity method – 30 10 10 – 6 – 4 0 * – – 4 Segment result 2) – 308 156 164 7 20 39 – 107 – 2 – 70

Other financial result – 13 Profit / loss before income taxes – 83 Segment assets 3) 14,753 842 3,033 264 1,287 20,179 1,668 7,685 29,532 of which from investments accounted for using the equity method 91 37 157 0 66 351 5 356 Segment liabilities 4) 10,511 470 1,283 202 505 12,971 1,470 7,929 22,370 Segment capital expenditure 5) 891 4 28 16 17 956 7 11 974 of which on investments accounted for using the equity method – – – – – – – – – Employees on balance sheet date 57,207 4,422 20,270 2,991 28,264 113,154 3,690 – 116,844

* Rounded below EUR 1m. 1) See page 7 of the interim management report for reconciliation between operating result and profit from operating activities. 2) Profit from operating activities including result of investments shown at equity. 3) Intangible assets, property, plant and equipment, investments accounted for using the equity method, inventories, trade receivables and other assets constitute assets. Under the heading “Group” all assets are shown. 4) All liabilities with the exception of financial debt, liabilities to Group companies, derivative financial instruments, other deferred income and tax obligations. Under the heading “Group” all liabilities are shown. 5) Capital expenditure for intangible assets, property, plant and equipment, and investments accounted for using the equity method.

34 Lufthansa 2nd Interim Report January – June 2011 To our shareholders | Interim management report Interim financial statements Further information Notes Declaration by the legal representatives

Figures by region January – June 2011

Europe thereof North thereof Central Asia / Pacific Middle East Africa Total Germany America U.S.A. and South in €m America

Traffic revenue * 7,691 3,194 1,556 1,360 258 1,555 320 217 11,597 Other operating revenue 1,147 417 571 490 43 431 162 112 2,466 Total revenue 8,838 3,611 2,127 1,850 301 1,986 482 329 14,063

* Traffic revenue is allocated according to the original location of sale.

Figures by region January – June 2010

Europe thereof North thereof Central Asia / Pacific Middle East Africa Total Germany America U.S.A. and South in €m America

Traffic revenue * 6,595 2,623 1,392 1,215 256 1,452 316 192 10,203 Other operating revenue 1,109 351 476 422 79 474 159 125 2,422 Total revenue 7,704 2,974 1,868 1,637 335 1,926 475 317 12,625

* Traffic revenue is allocated according to the original location of sale.

8) Related party disclosures Declaration by the legal representatives As stated in Note 48 to the consolidated financial statements for 2010 beginning on p. 208 , the operating segments in the Lufthansa We declare that to the best of our knowledge and according to Group render numerous services to related parties within the the applicable accounting standards for interim reporting the scope of their ordinary business activities and also receive services ­consolidated interim financial statements give a true and fair view from them. These extensive supply and service relationships of the net assets, financial and earnings position of the Group and take place unchanged on the basis of market prices. There have that the Group interim management report gives a true and fair been no significant changes in comparison with the balance sheet view of the course of business, including the business result, and date. The contractual relationships with the group of related par- the situation of the Group, and suitably presents the opportuni- ties described in Note 49 starting on p. 210 ­of the 2010 consolidated ties and risks to its future development in the remainder of the financial statements also still exist unchanged, but are not of finan­cial year. ­material significance for the Group.

Executive Board, 27 July 2011

Christoph Franz Stephan Gemkow Stefan Lauer Carsten Spohr Chairman of the Member of the Member of the Member of the Executive Board Executive Board Executive Board Executive Board and CEO Chief Financial Officer Chief Officer Group Airlines and Chief Officer Lufthansa Corporate Human Resources German Airlines

Lufthansa 2nd Interim Report January – June 2011 35 Lufthansa Group overview

ReviewKey fi gures Lufthansa Group report Credits Contact Financial calendar

Jan. – June Jan. – June Change April – June April – June Change Published by Frank Hülsmann 2011 To Deutsche Lufthansa AG, Cologne 2011 2010 in % 2011 2010 in % Deutsche Lufthansa AG Head of Investor Relations 27 Oct. Press Conference and Analysts’ Von-Gablenz-Str. 2– 6 + 49 69 696 – 28001 WeRevenue have and reviewed result the condensed consolidated interim financial accordance with the IFRS applicable to interim financial reporting Conference on interim result 50679 Cologne statementsTotal revenue – comprising the condensed statement€m of financial14,063 as adopted12,625 by the EU11.4 and that the7,624 interim group6,867 management11.0 Johannes Hildenbrock January – September 2011 Germany position, of which condensedtraffi c revenue statement of comprehensive€m income, con11,597- report10,203 has not been13.7 prepared, in 6,373all material respects,5,627 in accord13.3- + 49 69 696 – 28003 2012 densedOperating statement result of cash flows, condensed statement€m of changes3 ance– 171with the provisions of the German230 Securities159 Trading Act 44.7 Entered in the Commercial Register of Gregor Schleussner EBIT €m – 128 64 450 370 21.6 Cologne District Court under HRB 2168 15 March Press Conference and Analysts’ in equity and selected explanatory notes – and the interim group applicable to interim group management reports. A review is + 49 69 696 – 28012 EBITDA €m 739 876 – 15.6 880 777 13.3 Conference on 2011 results management report of Deutsche Lufthansa AG, Cologne, for the ­limited primarily to inquiries of company personnel and analytical Editorial staff Net profi t / loss for the period €m – 206 – 104 – 98.1 301 194 55.2 Deutsche Lufthansa AG period from 1 January to 30 June 2011 which are part of the procedures and therefore does not provide the assurance attai­ Frank Hülsmann (Editor) 3 May Release of Interim Report Investor Relations ­half-yearKey balance sheet and cash fl ow statement fi gures financial report pursuant to § (Article) 37w WpHG („Wert- nable in a financial statement audit. Since, in accordance with our Claudio Rizzo January – March 2012 LAC, Airportring papierhandelsgesetz“:Total assets German Securities Trading€m Act). The29,517 prep- engagement,29,532 we have– 0.1 not performed– a financial statement– audit,– Christian Schmidt 60546 Frankfurt am Main 8 May Annual General Meeting arationEquity ratio of the condensed consolidated interim financial% statements26.5 we cannot24.3 express2.2 an pts audit opinion. – – – Deutsche Lufthansa AG, Germany in Cologne inNet accordance indebtedness with the IFRS applicable to interim€m financial repor1,427t- 1,754 – 18.6 – – – Investor Relations Phone: + 49 69 696 – 28008 2 Aug. Release of Interim Report ingCash as fl adoptedow from operating by the activities EU and of the interim group€m management1,740 Based1,420 on our review,22.5 no matters have961 come to our856 attention that12.3 Fax: + 49 69 696 – 90990 Concept, design and realisation January – June 2012 reportCapital expenditurein accordance (gross) with the provisions of the German€m Securities1,437 cause974 us to presume47.5 that the condensed693 consolidated440 interim 57.5 E-mail: [email protected] HGB Hamburger Geschäftsberichte GmbH Trading Act applicable to interim group management reports is financial statements have not been prepared, in all material 31 Oct. Press Conference and Analysts’ Key profi tability and value creation fi gures & Co. KG, Hamburg, Germany The Lufthansa 2nd Interim Report is a the responsibility of the parent Company’s Board of Managing respects, in accordance with the IFRS applicable to interim finan- Conference on interim result Adjusted operating margin 1) % 0.4 – 1.0 1.4 pts 3.5 2.7 0.8 pts translation of the original German Lufthansa Directors. Our responsibility is to issue a review report on the cial reporting as adopted by the EU nor that the interim group Translation by January – September 2012 EBITDA margin % 5.3 6.9 – 1.6 pts 11.5 11.3 0.2 pts Zwischenbericht 2/2011. Please note that EnglishBusiness GbR, ­condensed consolidated interim financial statements and on the management report has not been prepared, in all material respects, only the German version is legally binding. interimLufthansa group share management report based on our review. in accordance with the provisions of the German Securities Trad- Hamburg, Germany You can order the Annual and Interim Reports Share price at the quarter-end € 15.03 ing Act11.39 applicable to32.0 interim group management– reports.– – Printed by in German or English via our website – WeEarnings conducted per share our review of the condensed consolidated€ interim– 0.45 – 0.23 – 95.7 0.66 0.42 57.1 Broermann Druck + Medien GmbH, www.lufthansa.com/investor-relations – or financial statements and the interim group management report Troisdorf, Germany Traffi c fi gures from the address above. in accordance with German generally accepted standards for the Düsseldorf, 28 July 2011 Printed on Circlesilk Premium White Passengers thousands 50,234 45,627 10.1 28,147 24,983 12.7 review of financial statements promulgated by the Institut der (100 per cent recycled paper bearing the The latest fi nancial information on the internet: Passenger load factor % 75.4 77.3 – 1.9 pts 78.0 79.3 – 1.3 pts EU Ecolabel, registration number FR/011/003) www.lufthansa.com/investor-relations Wirtschaftsprüfer (Institute of Public Auditorsthousand in Germany) (IDW) PricewaterhouseCoopers andFreight additionally and mail observed the International Standardtonnes on Review1,070 Aktiengesellschaft939 13.9 542 493 9.8 Printed in Germany EngagementsCargo load factor „Review of Interim Financial Information% Per- 66.6 Wirtschaftsprüfungsgesellschaft68.9 – 2.3 pts 65.9 69.1 – 3.2 pts ISSN 1616-0258 formedAvailable tonne-kilometresby the Independent Auditor of the Entity“millions (ISRE 2410).20,624 18,558 11.1 10,812 9,719 11.2 ThoseRevenue standards tonne-kilometres require that we plan and performmillions the review14,752 so 13,666 7.9 7,863 7,290 7.9 thatOverall we load can factor preclude through critical evaluation, with% moderate71.5 Frank73.6 Hübner – 2.1 pts Dr. Bernd72.7 Roese 75.0 – 2.3 pts assurance,Flights that the condensed consolidatednumber interim financial557,760 Wirtschaftsprüfer526,934 5.9 Wirtschaftsprüfer291,299 271,997 7.1 statementsEmployees have not been prepared, in all material respects, in (German Public Auditor) (German Public Auditor) Employees as of 30.6. number 118,766 116,844 1.6 118,766 116,844 1.6

1) Performance indicator to enable comparison with other airlines: (operating result + write-backs of provisions) / revenue. Date of publication: 28 July 2011.

Contents Disclaimer in respect of forward-looking statements Information published in the 2nd Interim Report 2011, with regard to the future development of the Lufthansa Group and its subsidiaries consists purely 1 To our shareholders 35 Further information of forecasts and assessments and not of defi nitive historical facts. Its purpose is exclusively informational identifi ed by the use of such cautionary terms as “believe”, “expect”, “forecast”, “intend”, “project”, “plan”, “estimate” or “intend”. These forward-looking statements are based on all discernible 3 Interim management report 37 Credits/Contact information, facts and expectations available at the time. They can, therefore, only claim validity up to the date of their publication. 24 Interim fi nancial statements Financial calendar 2011/2012 Since forward-looking statements are by their nature subject to uncertainties and imponderable risk factors – such as changes in underlying economic conditions – and rest on assumptions that may not or divergently occur, it is possible that the Group’s actual results and development may differ materially from those implied by the forecasts. Lufthansa makes a point of checking and updating the information it publishes. It cannot, however, assume any obligation to adapt forward-looking statements to accommodate events or developments that may occur at some later date. Accordingly, it neither expressly nor conclusively accepts liability, nor gives any guarantee, for the actuality, accuracy and completeness of this data and information.

36 Lufthansa 2nd Interim Report January – June 2011 Lufthansa Group overview

Key fi gures Lufthansa Group Credits Contact Financial calendar

Jan. – June Jan. – June Change April – June April – June Change Published by Frank Hülsmann 2011 2011 2010 in % 2011 2010 in % Deutsche Lufthansa AG Head of Investor Relations 27 Oct. Press Conference and Analysts’ Von-Gablenz-Str. 2– 6 + 49 69 696 – 28001 Revenue and result Conference on interim result 50679 Cologne Total revenue €m 14,063 12,625 11.4 7,624 6,867 11.0 Johannes Hildenbrock January – September 2011 Germany of which traffi c revenue €m 11,597 10,203 13.7 6,373 5,627 13.3 + 49 69 696 – 28003 2012 Operating result €m 3 – 171 230 159 44.7 Entered in the Commercial Register of Gregor Schleussner EBIT €m – 128 64 450 370 21.6 Cologne District Court under HRB 2168 15 March Press Conference and Analysts’ + 49 69 696 – 28012 EBITDA €m 739 876 – 15.6 880 777 13.3 Conference on 2011 results Editorial staff Net profi t / loss for the period €m – 206 – 104 – 98.1 301 194 55.2 Deutsche Lufthansa AG Frank Hülsmann (Editor) 3 May Release of Interim Report Investor Relations Key balance sheet and cash fl ow statement fi gures Claudio Rizzo January – March 2012 LAC, Airportring Total assets €m 29,517 29,532 – 0.1 – – – Christian Schmidt 60546 Frankfurt am Main 8 May Annual General Meeting Equity ratio % 26.5 24.3 2.2 pts – – – Deutsche Lufthansa AG, Germany in Cologne Net indebtedness €m 1,427 1,754 – 18.6 – – – Investor Relations Phone: + 49 69 696 – 28008 2 Aug. Release of Interim Report Cash fl ow from operating activities €m 1,740 1,420 22.5 961 856 12.3 Fax: + 49 69 696 – 90990 Concept, design and realisation January – June 2012 Capital expenditure (gross) €m 1,437 974 47.5 693 440 57.5 E-mail: [email protected] HGB Hamburger Geschäftsberichte GmbH 31 Oct. Press Conference and Analysts’ Key profi tability and value creation fi gures & Co. KG, Hamburg, Germany The Lufthansa 2nd Interim Report is a Conference on interim result Adjusted operating margin 1) % 0.4 – 1.0 1.4 pts 3.5 2.7 0.8 pts translation of the original German Lufthansa Translation by January – September 2012 EBITDA margin % 5.3 6.9 – 1.6 pts 11.5 11.3 0.2 pts Zwischenbericht 2/2011. Please note that EnglishBusiness GbR, only the German version is legally binding. Lufthansa share Hamburg, Germany You can order the Annual and Interim Reports Share price at the quarter-end € 15.03 11.39 32.0 – – – Printed by in German or English via our website – Earnings per share € – 0.45 – 0.23 – 95.7 0.66 0.42 57.1 Broermann Druck + Medien GmbH, www.lufthansa.com/investor-relations – or Troisdorf, Germany from the address above. Traffi c fi gures Printed on Circlesilk Premium White Passengers thousands 50,234 45,627 10.1 28,147 24,983 12.7 (100 per cent recycled paper bearing the The latest fi nancial information on the internet: Passenger load factor % 75.4 77.3 – 1.9 pts 78.0 79.3 – 1.3 pts EU Ecolabel, registration number FR/011/003) www.lufthansa.com/investor-relations thousand Freight and mail tonnes 1,070 939 13.9 542 493 9.8 Printed in Germany Cargo load factor % 66.6 68.9 – 2.3 pts 65.9 69.1 – 3.2 pts ISSN 1616-0258 Available tonne-kilometres millions 20,624 18,558 11.1 10,812 9,719 11.2 Revenue tonne-kilometres millions 14,752 13,666 7.9 7,863 7,290 7.9 Overall load factor % 71.5 73.6 – 2.1 pts 72.7 75.0 – 2.3 pts Flights number 557,760 526,934 5.9 291,299 271,997 7.1

Employees Employees as of 30.6. number 118,766 116,844 1.6 118,766 116,844 1.6

1) Performance indicator to enable comparison with other airlines: (operating result + write-backs of provisions) / revenue. Date of publication: 28 July 2011.

Contents Disclaimer in respect of forward-looking statements Information published in the 2nd Interim Report 2011, with regard to the future development of the Lufthansa Group and its subsidiaries consists purely 1 To our shareholders 35 Further information of forecasts and assessments and not of defi nitive historical facts. Its purpose is exclusively informational identifi ed by the use of such cautionary terms as “believe”, “expect”, “forecast”, “intend”, “project”, “plan”, “estimate” or “intend”. These forward-looking statements are based on all discernible 3 Interim management report 37 Credits/Contact information, facts and expectations available at the time. They can, therefore, only claim validity up to the date of their publication. 24 Interim fi nancial statements Financial calendar 2011/2012 Since forward-looking statements are by their nature subject to uncertainties and imponderable risk factors – such as changes in underlying economic conditions – and rest on assumptions that may not or divergently occur, it is possible that the Group’s actual results and development may differ materially from those implied by the forecasts. Lufthansa makes a point of checking and updating the information it publishes. It cannot, however, assume any obligation to adapt forward-looking statements to accommodate events or developments that may occur at some later date. Accordingly, it neither expressly nor conclusively accepts liability, nor gives any guarantee, for the actuality, accuracy and completeness of this data and information. 2nd Interim Report January – June 2011 2

Vision

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