S&P changes Lufthansa outlook

S&P said it revised its outlook on Deutsche Lufthansa AG to positive from stable and affirmed the BBB- long-term and A-3 short-term issuer credit ratings.

The agency also affirmed all the ratings on Lufthansa's debt instruments.

The agency said the revision follows Lufthansa reporting stronger free cash flow generation and lower S&P-adjusted debt than the agency previously expected for 2017, resulting in improved credit metrics, despite the airline's asset deal to acquire or lease-in 65 planes from insolvent Air Berlin.

The revision also reflects a view that Lufthansa could sustain its reduced adjusted debt position and generate free cash flow to provide ample financial leeway for future external growth while maintaining adjusted funds from operations to debt above 30% over the next two years, which is within S&P’s thresholds for the higher BBB rating, the agency said.

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