Casting doubt on a recent statement by Klaus Schlede, Lufthansa's chief financial officer, that the airline should be back in the black in 1994, the consultants expect the heavy operating losses to continue until 1996 at an annual rate of between DM800m and DM985m ( pounds 338m- pounds 416m).
Lufthansa's current savings programme, including the loss of more than 6,000 jobs from its present level of 46,000, is hopelessly inadequate, given the scale of the difficulties, McKinsey says.
Between 1986 and 1992 Lufthansa accumulated losses of DM3.2bn. The McKinsey forecast for the period up to 1996 would add another DM4bn to this figure.
Falling revenues, rising costs and insufficient capacity utilisation will quickly consume the current capital base of DM2.7bn, the consultants warn.
The report has caused alarm in the Finance Ministry in Bonn as the German government owns just over 50 per cent of Lufthansa.
In its official reaction the airline said that the consultants' report was based on 'unrealistic assumptions'.
Privately, however, Lufthansa managers conceded that the report reflected a realistic view of the company's prospects.
The airline's own business plan is based on the assumption of a continuous wage freeze until 1995 and annual growth in earnings in 1994 and 1995 of more than DM1bn, all of which are considered in some quarters to be optimistic.
Although desperate for a new injection of capital, Lufthansa has few options.
The Finance Ministry, with overwhelming budgetary problems of its own, is unwilling to hand out more money. And the airline's present shape does not make it an attractive candidate for the capital markets.
At the centre of the Lufthansa management's strategy for recovery is the wish to break out of the expensive and inflexible conditions imposed by being a public sector company, by 'flagging out' the loss-making domestic and European services into a privatised firm, Lufthansa Express.
Union opposition has, however, blocked the plan until now.