Composition of the Group

50. Group of consolidated companies

The consolidated financial statements of Deutsche Lufthansa AG include all major subsidiaries, joint ventures and associated companies.

Subsidiaries are entities over which Deutsche Lufthansa AG has rights that give it the ability to control the entity’s relevant activities. Relevant activities are those activities that have a significant influence on the entity’s return. Deutsche Lufthansa AG therefore only has control over a company when it is exposed to variable returns from the company and its power over the company's relevant activities enables it to influence these returns. This definition of control also applies to structured entities that are identified as such in the list of significant Group companies. In general, the ability to control subsidiaries arises when Deutsche Lufthansa AG holds a direct or indirect majority of voting shares. In structured entities, the ability to control does not come from holding the majority of voting shares, but rather from contractual agreements. Entities are consolidated from the time that the ability to control begins. They cease to be consolidated when the ability to control ends.

Joint arrangements are classified either as joint ventures or as joint operations. A joint arrangement exists when the Lufthansa Group carries on joint business activities with third parties on the basis of a contractual agreement. Joint management or control only exists when decisions on activities that have a significant effect on the returns from an agreement require the unanimous approval of the parties sharing control.

Significant interests in companies that are managed jointly with one or more partners (joint ventures) are accounted for using the equity method. Joint operations are defined by the fact that the parties exercising joint control over the arrangement have rights to the assets attributed to the arrangement and are liable for its debts. Assets and liabilities, revenue and expenses from the significant joint operations are recognised in the consolidated financial statements of the Lufthansa Group in proportion to these rights and obligations.

Associated companies are companies in which Deutsche Lufthansa AG has the opportunity to exercise significant influence over financial and operating policy based on an interest of between 20% and 50%. Significant associated companies are accounted for in the consolidated financial statements using the equity method.

A list of major subsidiaries, joint arrangements and associated companies can be found in tables ↗ T178 to T181, and the list of shareholdings in table ↗ T182. 

In addition to Deutsche Lufthansa AG as the parent company, the group of consolidated companies includes 50 domestic and 190 foreign companies, including structured entities (previous year: 52 domestic and 266 foreign companies).

One material joint operation was also included in the consolidated financial statements on a pro rata basis in accordance with IFRS 11. It consists of a German cargo airline operated jointly by Deutsche Post AG and Deutsche Lufthansa AG, which each hold 50% of the share capital and voting rights. The two shareholders are also customers of the company and use the capacities of its cargo aircraft. In contrast to its capital and voting rights, the company’s assets and liabilities, as well as its income and expenses, are allocated based on the user relationship of the shareholders according to their contracts.

The changes in the group of consolidated companies during the 2023 financial year are shown in table T172.

Use of exemption provisions

The following fully consolidated German Group companies made use of the exemption provisions in Section 264 Paragraph 3 and Section 264b HGB in 2023.

The companies are affiliated with Deutsche Lufthansa AG by means of direct or indirect profit and loss transfer agreements.

The consolidated financial statements include investments in 28 joint ventures and 22 associated companies (previous year: 28 joint ventures and 34 associated companies), of which nine joint ventures (previous year: nine) and two associated companies (previous year: 14) were accounted for using the equity method. The other joint ventures and associated companies were valued at amortised cost due to their minor overall significance.

51. Related party disclosures

Kühne Aviation GmbH, for Klaus-Michael Kühne, notified the Executive Board of Deutsche Lufthansa AG that on 5 July 2022 its share of voting rights in Deutsche Lufthansa AG had exceeded the threshold of 15% and amounted to 15.01% on this date. A significant influence is only assumed when the share of voting rights exceeds 20%.

On the basis of the above assumption, no individual shareholders of Deutsche Lufthansa AG exercise significant influence over the Group. For transactions involving members of the Executive Board and Supervisory Board (“directors’ dealings”), see ↗ Note 52.

Balances and transactions between the Company and its fully consolidated subsidiaries, which constitute related parties, have been eliminated in the course of consolidation and are not commented on in this Note. Details of transactions between the Lufthansa Group and other related parties are disclosed below.

The Lufthansa Group segments render numerous services to related parties within the scope of their ordinary business activities. Conversely, the companies in question provide services to the Lufthansa Group as part of their normal business. These extensive supply and service relationships take place on the basis of market prices.

In addition, the Lufthansa Group and certain non-consolidated subsidiaries have concluded numerous billing agreements, partly governing the joint use of services. In these cases, the administrative services provided are charged as cost allocations.

The Lufthansa Group’s cash management is centralised, and, in this respect, the Group also performs a banking function vis-à-vis the non-consolidated companies of the Group. Non-consolidated Group companies included in the Group’s cash management invest their available cash with the Group or borrow funds from the Group and carry out their derivative hedging transactions with the Group. All transactions take place on arm’s length terms.

Due to geographical proximity in many cases, a large number of subletting contracts is in place between the Lufthansa Group and related parties. In these cases, the Lufthansa Group usually charges the rental costs and incidental expenses incurred to the companies in question on a pro rata basis.

Table T174 shows the volume of significant services provided to or by related parties.

Tables T175 and T176 show receivables owed by and liabilities to related parties.

52. Supervisory Board and Executive Board

The disclosure of remuneration for key managers required by IAS 24 includes the remuneration of the active members of the Executive Board and Supervisory Board.

The members of the Executive Board and the Supervisory Board as well as the other offices that they hold are named in the combined management report in the section ↗ Corporate Governance.

The principles of the remuneration system and the amount of remuneration paid to Executive Board and Supervisory Board members are shown and explained in detail in the remuneration report. The remuneration report forms part of the Annual Report 2023.

Total Executive Board remuneration under IFRS was EUR 29.5m (previous year: EUR 38.5m), including current service costs for pensions of EUR 3.4m (previous year: EUR 3.2m).

The active members of the Executive Board in past reporting years were remunerated as follows:

Pension provisions for Executive Board members active in the 2023 financial year came to EUR 23.8m (previous year: EUR 18.5m).

Provisions of EUR 7,884k (previous year: EUR 7,912k) were recognised in 2023 for the one-year variable remuneration.

An increase of EUR 10,517k (previous year: increase of EUR 20,140k) was recognised for provisions for the future payment of long-term variable remuneration for Executive Board members active in financial year 2023. The payment made in the previous year for long-term share-based remuneration resulted in additional expenses of EUR 142k.

Total remuneration (HGB) paid to the Executive Board of Deutsche Lufthansa AG in financial year 2023 came to EUR 22,138k (previous year: EUR 28,496k).

Current payments and other benefits for former members of the Executive Board and their surviving dependants amounted to EUR 9.2m (EUR 5.7m). This includes payments by subsidiaries as well as benefits in kind and concessionary travel.

Pension obligations toward former Executive Board members and their surviving dependants amount to EUR 49.7m (previous year: EUR 51.3m). They are included in the pension provisions under ↗ Note 36.

Expenses for the fixed remuneration of Supervisory Board members came to EUR 2,966k in the 2023 financial year (previous year: EUR 2,170k). Other remuneration amounted to EUR 3k in total (previous year: EUR 62k, mainly attendance fees). Furthermore, the Supervisory Board members of Deutsche Lufthansa AG were paid EUR 13k (previous year: EUR 21k) for their work on supervisory boards of Group companies.

In the reporting year, as in the previous year, no loans or advance payments were made to members of the Executive Board or to members of the Supervisory Board.

In addition to their Supervisory Board remuneration, employee representatives on the Supervisory Board received compensation for their work in the form of wages and salaries including pension entitlements amounting to EUR 1.0m in total in financial year 2023 (previous year: EUR 1.0m).