A near €1bn Lufthansa software sale would price the business at 20 times EBITDA

A price just under €1bn is about 20 times the roughly €50m EBITDA of the businesses on offer. The unit reports only €9m of adjusted EBIT, so Lufthansa's supply contract sets the real price.

Lufthansa is exploring a sale of businesses inside its aviation software arm, with just under €1bn in play. That is about 20 times their EBITDA, a high software multiple, for businesses whose first customer is the seller.

Lufthansa has hired bankers to test the market. The Financial Times reported on Friday that the group is exploring a sale of businesses inside Lufthansa Systems. Talks are at an early stage and no decisions have been taken.

The same report gave two numbers. The businesses generate substantially more than €200m of revenue and roughly €50m of EBITDA. EBITDA means earnings before interest, tax, depreciation and amortisation. It is a rough measure of operating profit before capital charges and ignores the spending a software business needs to build and update its products.

Those numbers frame the price. Just under €1bn on €50m of EBITDA is about 20 times. On €200m of revenue it is less than five times. That looks like a software multiple, not a distressed disposal.

The multiple hides what matters most to a buyer. The products cover flight planning, crew management and schedules. The group's own airlines are among their customers, so the seller would hand over a business that depends on the seller.

The profit Lufthansa reports for the whole unit is far smaller. Adjusted EBIT, which is operating profit including equity investments, was €3m in 2022 and €4m in 2023. It fell to €2m in 2024. Then it rose to €9m in 2025.

Divide €1bn by €9m and the answer is 111 times. The headline price looks absurd until the other figure sits beside it. The two numbers measure different things.

The €50m is EBITDA, before depreciation and amortisation, for the businesses on offer. The €9m is operating profit after those charges for the whole unit. Part of the gap will probably be amortised development spending, which software groups carry heavily. Part is perimeter, because the sources say one unit supplying specialist bespoke services to the airline would stay behind. A financial buyer will price on the larger figure.

The sale fits Lufthansa's pattern of selling non core businesses. It sold its catering business in 2023. It also agreed to sell the payments specialist AirPlus to SEB Kort for around €450m. Its chief financial officer called that a strategy to focus on the core business.

A price just under €1bn would be more than twice what AirPlus fetched. It would also be for a business much closer to running a flight than card payments are. The same sources said the software sale is not needed to fund the group's bid for a large minority stake in TAP Air Portugal.

The report ties the timing to costs. Airline groups want to cut costs and sell non core units as expenses rise. Jet fuel prices have doubled since the Iran war, and European carriers face rising environmental charges. The stated aim is to focus on passenger and cargo operations.

Buyers are waiting. The report cited Thoma Bravo's $10.5bn deal last year for parts of Boeing's digital aviation unit, including Jeppesen. It also cited older sponsor purchases of airline software from British Airways and Emirates. The report says buyout investors are searching for businesses that private equity firms have not yet owned.

The precedent also shows the limit of the comparison. An aircraft maker sold Jeppesen to a financial owner. Lufthansa Systems would be sold by an airline group that remains one of its heaviest users.

A multiple of 20 asks the new owner to grow EBITDA. The quick ways are higher prices and lower costs. The 2025 annual report says a new India location will expand delivery. It also says an internal transformation programme provided the basis for profitability growth and efficiency gains. So the cost route is under way.

The price route runs through contracts, and the largest contract belongs to the seller. Sponsors routinely pay far above trailing profit for software carve outs with improving margins. That makes the margin the promise, and part of that promise would be collected from Lufthansa's own airlines.

The contract therefore sets the value. A buyer paying 20 times EBITDA will want a long supply agreement from Lufthansa's airlines, with committed volumes and room to raise prices.

Lufthansa would receive cash and lose control of the product roadmap. Every request for a new feature, a faster fix or a lower price would become a commercial negotiation. The owner's return would depend on the answer.

A sale without that agreement lowers the price and leaves Lufthansa dependent on a vendor it cannot easily replace. The first route is likelier, because a sponsor needs the contract to justify a figure of this size.

The same logic reaches the roughly 350 customers cited in Lufthansa's annual report. Their agreements decide how much revenue a new owner can count on. Change of control clauses, which let a customer react when ownership changes, matter most.

An airline that runs Lido for flight planning or NetLine for operations has options. It can use the sale window to renew early at today's prices. It can also run a rival tender before a financial owner starts repricing. The product names and scope are on the Lufthansa Systems product page.

The unit is small in Lufthansa's own accounts. Lufthansa Systems sits inside Additional Businesses and Group Functions, which lost €92m on adjusted EBIT in 2025. The group as a whole earned €1,960m of adjusted EBIT.

The segment's other IT company, Lufthansa Industry Solutions, earned €40m in 2025 against €28m a year earlier. So the software unit is the smaller earner of the two. It is also the one closest to flight operations.

Lufthansa's annual report for 2026, due in March 2027, will show whether Lufthansa Systems' adjusted EBIT has risen from €9m. If it is still under €20m after another year of the transformation programme, a price near €1bn will have paid for the customer base and the contract. Earnings will have been a minor part of it.