Bloomberg News

Lufthansa Investment Freeze Stops Finnair Catering Unit Purchase

May 31, 2012

Deutsche Lufthansa AG (LHA), Europe’s second-biggest airline, has backed out of a deal to buy Finnair (FIA1S) Oyj’s catering operations after it froze new investments as part of a savings program.

The sale to Lufthansa’s catering unit LSG Sky Chefs, which was announced in March and expected to be completed by the end of June, wasn’t approved by the German carrier’s supervisory board, Vantaa, Finland-based Finnair said in a statement.

“This is naturally a disappointment both to LSG Sky Chefs and to us as we had worked hard to make the cooperation work for the benefit of both parties,” Anssi Komulainen, Finnair’s head of customer service, said in the statement.

Lufthansa, which is targeting 1.5 billion euros ($1.86 billion) in cost savings through 2014, said yesterday it may cut as many as 1,000 jobs at LSG Sky Chefs, the world’s biggest inflight caterer. The unit has 29,000 employees and supplies 300 airlines globally.

Finnair’s catering business, which the company said in its annual report was the most profitable aviation services unit, had revenue of 80 million euros in 2011, according to today’s statement.

To contact the reporter on this story: Alex Webb in Frankfurt at

To contact the editor responsible for this story: Chad Thomas at

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