Lufthansa weighs options for catering arm sky chefs


Deutsche Lufthansa AG is exploring options including a sale for LSG Sky Chefs, the catering arm that serves planes, trains and the International Space Station, according to people with knowledge of the matter.
The German airline is working with advisers to review the business, according to the people, who asked not to be identified because the information is private. Other possibilities include a combination with a competitor or selling a stake to a partner, they said.
Airline catering is growing more slowly than overall air traffic, as short-haul flying outpaces longer routes and budget carriers gain market share. With travellers increasingly unwilling to pay for food on shorter hops and airlines pressuring suppliers on costs, caterers have been branching out into supplying trains and supermarkets to make up for lost business.
Deliberations are at an early stage, and Lufthansa isn’t running a formal sale process, according to the people. It could still opt to retain its ownership of LSG Sky Chefs, the people said. A representative for Lufthansa declined to comment.

Lufthansa shares rose 0.8 percent to 19.10 euros in Frankfurt trading after earlier gaining as much as 3 percent, the biggest intraday jump since July.
LSG Group’s sales were little changed last year at 3.2 billion euros and earnings before interest and taxes fell to 45 million euros from 60 million euros in 2016, according to the company’s annual report. The group, based in Neu-Isenburg near Frankfurt, produced 696 million meals in 2017, according to its website.
Lufthansa told investors in July that cost cuts and higher fares would help it reach full-year targets, after disruption from storms and air-traffic-control strikes hurt second-quarter earnings. The carrier has struggled to integrate aircraft it took over from failed rival Air Berlin Plc, while higher fuel costs have been a source of concern.

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