TRANSPORTATION: Lufthansa (LHAGR; Baa3/BBB-/BBB-) more remarks from CEO
The CEO was quotedcriticising German regulation over the weekend; "the extremely high state costs in air transport are leading to a further shrinking offer...more and more airlines are avoiding German airports or cancelling important connections...the quality of connections to many important economic regions is declining".
Ryanair CEO has echoed this in the past threatening to cut capacity unless taxes and fees were reduced - a week later he proceeded to trim Berlin capacity by 20%, redeploying those routes into Italy, Poland and Spain. Still O'Leary might question the net impact to Lufthansa - in the past he has said the competitor runs a "high fare-monopoly" in the country.
Above adds to already weak sentiment from the CEO - earlier this month he said the flagship airline is still dragging on group margins. Earnings are scheduled for 29th Oct - if we are to get a earnings warning (2/2 strike rate this year) then this week would be the likely timing. We do see rating risk this year but curve seems to be indifferent to weak fundamental's trading flat to IAG - unclear how much 1k-denom/retail is supporting levels.