Lufthansa 'likely' to review aircraft financing strategy

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Lufthansa is considering a change to its aircraft amortisation policy as it struggles to maintain asset values when the equipment is retired.

The German flag carrier has been observing for some time that when aircraft leave the fleet, their market values are below the residual values in the airline’s books, said chief financial officer Simone Menne during an investor call on 31 October.

Lufthansa’s aircraft financing policy allows for a 12-year amortisation period.

However, the duration of that period and the residual value calculation could be adjusted to market developments, Menne says.

Management will "likely have to review the [airline’s] depreciation policy", she adds.

An update on the potential change is to be given during the full-year results presentation in March.