Lufthansa is considering the sale of certain software assets within its Lufthansa Systems division in a deal valued at close to €1 billion. The German airline has engaged investment bankers to explore potential buyers for these businesses, which provide IT services tailored to the aviation sector, according to sources familiar with the matter.

This move is part of Lufthansa’s broader strategy to streamline its operations by divesting non-core units and concentrating on its passenger and cargo services. Over recent years, the airline has gradually shed businesses outside its main focus areas, including the sale of its catering arm in 2023 and its AirPlus credit card division earlier this year, the latter fetching €450 million.

Industrywide, airlines are under pressure to manage rising costs as jet fuel prices have doubled following geopolitical tensions in the Middle East. In addition, forthcoming environmental regulations in Europe are expected to increase carriers’ operating expenses. Simultaneously, airlines are making significant capital investments, with tens of billions of euros committed to new aircraft deliveries over the coming decade.

The software assets under review reportedly generate more than €200 million in revenues annually and contribute around €50 million in earnings before interest, taxes, depreciation, and amortization (EBITDA). A potential transaction might encompass most of Lufthansa Systems’ operations, excluding a specialized unit dedicated to bespoke services for the airline. The sale could also include the group’s Sirax revenue accounting software.

Sources noted that discussions remain at an early stage with no binding decisions made yet. The businesses are expected to attract interest from private equity investors, who have increasingly targeted aviation-related technology firms. The sector has seen significant deals recently, such as Thoma Bravo’s $10.5 billion acquisition of parts of Boeing’s digital aviation unit last year.

Lufthansa has not commented on the reports. Meanwhile, the airline continues to plan significant new investments, recently securing contracts related to crew management and schedule planning, further emphasizing its focus on core operational capabilities.