Lufthansa’s DAX spot shaky as unions, Brexit weigh on shares
Lufthansa shares, which have been trading near their lowest level in four years, are at risk of dropping out of Germany’s benchmark DAX Index as the airline battles low-cost competitors, unions and a shaky credit rating. Lufthansa’s market value now ranks 40th among DAX members, down from 35th place in April, according to data published by Deutsche Boerse AG Thursday. Companies that fall below a certain threshold must leave the index, putting Lufthansa at risk when the stock exchange operator next reviews the DAX composition on Dec. 5. Membership is reserved for Germany’s 30 biggest publicly listed companies, which Deutsche Boerse determines based on a combination of market value and trading volumes. Shares in Germany’s biggest airline have lost 35% this year and fell 0.9% to 9.56 euros at 3:06 p.m. in Frankfurt trading, bringing the company’s market value to E4.4b. That compares with E99.9b for SAP, the biggest DAX member, and E14.9b at Ryanair Holdings, Europe’s largest carrier by market value. Lufthansa shares fell below E10 last month for the first time since September 2012. CEO Carsten Spohr, who took over at Lufthansa in 2014, has issued three profit warnings amid increased competition from discount airlines and escalating union disputes. Britain’s decision to leave the EU has exacerbated Lufthansa’s woes as rivals such as EasyJet and Ryanair add German flights to reduce their dependence on the UK. In addition, Lufthansa’s credit rating is in jeopardy of falling to junk after S&P Global Ratings last month cut its outlook to negative amid concerns about the company’s ability to plug its record-high pension deficit. Cabin crew union UFO on Thursday threatened to call strikes as early as next week at the carrier’s low-cost Eurowings arm, after competing labor group Ver.di already staged a warning strike at the unit last month. While Lufthansa’s market value is already the smallest among the 30 DAX companies, it has retained its membership because Deutsche Boerse also takes number of shares traded into account. <br/>
https://portal.staralliance.com/cms/news/hot-topics/2016-10-07/star/lufthansa2019s-dax-spot-shaky-as-unions-brexit-weigh-on-shares
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Lufthansa’s DAX spot shaky as unions, Brexit weigh on shares
Lufthansa shares, which have been trading near their lowest level in four years, are at risk of dropping out of Germany’s benchmark DAX Index as the airline battles low-cost competitors, unions and a shaky credit rating. Lufthansa’s market value now ranks 40th among DAX members, down from 35th place in April, according to data published by Deutsche Boerse AG Thursday. Companies that fall below a certain threshold must leave the index, putting Lufthansa at risk when the stock exchange operator next reviews the DAX composition on Dec. 5. Membership is reserved for Germany’s 30 biggest publicly listed companies, which Deutsche Boerse determines based on a combination of market value and trading volumes. Shares in Germany’s biggest airline have lost 35% this year and fell 0.9% to 9.56 euros at 3:06 p.m. in Frankfurt trading, bringing the company’s market value to E4.4b. That compares with E99.9b for SAP, the biggest DAX member, and E14.9b at Ryanair Holdings, Europe’s largest carrier by market value. Lufthansa shares fell below E10 last month for the first time since September 2012. CEO Carsten Spohr, who took over at Lufthansa in 2014, has issued three profit warnings amid increased competition from discount airlines and escalating union disputes. Britain’s decision to leave the EU has exacerbated Lufthansa’s woes as rivals such as EasyJet and Ryanair add German flights to reduce their dependence on the UK. In addition, Lufthansa’s credit rating is in jeopardy of falling to junk after S&P Global Ratings last month cut its outlook to negative amid concerns about the company’s ability to plug its record-high pension deficit. Cabin crew union UFO on Thursday threatened to call strikes as early as next week at the carrier’s low-cost Eurowings arm, after competing labor group Ver.di already staged a warning strike at the unit last month. While Lufthansa’s market value is already the smallest among the 30 DAX companies, it has retained its membership because Deutsche Boerse also takes number of shares traded into account. <br/>
