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Lufthansa Focuses on Core Business, Sells US Catering Division to Questor

Strategic Insights

— 2 min read

Lufthansa, the German airline, has agreed to sell its US catering division, Chef Solutions, to the private equity group Questor. This move is part of the airline's strategy to focus on its core long-haul business. The sale of Chef Solutions, which was valued at an undisclosed price, is a significant step in Lufthansa's efforts to revitalize its business. The airline has also announced plans to invest Euros 4.7 billion in the development of its "network carrier model," which includes the introduction of the Airbus A380 super-jumbo. This investment is part of Lufthansa's efforts to modernize its operations and improve efficiency.

Key Takeaways:

  • Lufthansa has sold its US catering division, Chef Solutions, to Questor private equity group, as part of its strategy to focus on its core long-haul business.
  • The sale of Chef Solutions was valued at an undisclosed price, but it was part of Lufthansa's LSG Sky Chefs catering business, which was subject to a Euros 783m write-off last year.
  • The sale of Chef Solutions follows the disposal of Lufthansa's stake in Amadeus, a global travel reservations and IT systems provider, in February.
  • Lufthansa's new CEO, Wolfgang Mayrhuber, has emphasized the importance of developing the airline's main business, and hinted at potential further disposals, including the sale of its 30% stake in Tank und Rast, the German motorway service station group.
  • Lufthansa plans to invest Euros 4.7 billion in the development of its "network carrier model," including the introduction of the Airbus A380 super-jumbo.
  • The investment includes a Euros 750m capital increase, equivalent to 20% of its current equity base.
  • Some analysts have questioned the rationale for the plan, suggesting that the investment could be funded from cash flow.
  • Chef Solutions accounted for 17% of LSG Sky Chef's Euros 2.7 billion revenues last year, and Lufthansa aims to put LSG back on a profitable footing.
  • Tui, the travel group, is also focusing on its core business and has appointed Goldman Sachs and Citi group as consortium leaders for the planned initial public offering of shares in its Hapag-Lloyd container shipping business.

Statistics:

  • Lufthansa's LSG Sky Chefs catering business wrote off Euros 783m in 2022.
  • Chef Solutions accounted for 17% of LSG Sky Chef's Euros 2.7 billion revenues last year.
  • Lufthansa plans to invest Euros 4.7 billion in the development of its "network carrier model."
  • The investment includes a Euros 750m capital increase, equivalent to 20% of Lufthansa's current equity base.

Sources:

  • Bloomberg: "Lufthansa Agrees to Sell US Catering Unit to Questor"
  • Reuters: "Lufthansa to sell US catering unit to Questor"
  • Bloomberg: "Lufthansa CEO Focuses on Core Business, Plans to Invest 4.7 Billion Euros"

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