Status: October 12, 2021 10:39 a.m.
Lufthansa is making progress in withdrawing from state aid. The group has reimbursed 1.5 billion euros from the federal silent participations. Further steps are to follow by the end of the year.
The Lufthansa Group, which was hard hit by the Corona crisis, has repaid part of the state aid. A silent contribution from the Federal Economic Stabilization Fund (WSF) had completely replaced 1.5 billion euros, the airline said yesterday evening. The remaining billion – a second silent contribution – should be repaid by the end of the year.
Corona crisis: Lufthansa pays back another part of government aid worth billions
10/12/2021 7:05 am
CEO Spohr confident
Lufthansa had raised the funds for this through a capital increase, which had a volume of 2.162 billion euros. “We are very grateful that Deutsche Lufthansa AG has been stabilized with tax revenues in the most difficult times,” said Lufthansa boss Carsten Spohr. “We are increasingly optimistic about the future.”
This means that the airline is making headway in its attempt to get itself back on its feet financially. In the Corona crisis, Lufthansa received state silent participations of up to 5.7 billion euros, of which only a part was used. In addition, there was a state-secured loan of up to three billion euros. As part of a direct investment, the WSF had also secured 20 percent of the Lufthansa shares for 300 million euros. The silent participations, like the equity participation, are counted as equity, which relieves the pressure on Lufthansa’s balance sheet and makes it easier to raise outside capital.
Less state, more freedom of action
Government support also has disadvantages for the airline. On the one hand, the loans result in a comparatively high interest burden. State support also restricts the Group’s ability to act. The repayment of all state aid is a prerequisite for further mergers and acquisitions among Europe’s airlines. As long as companies in the industry are supported by the state, they are prohibited from merging. Lufthansa boss Carsten Spohr said at the announcement of the capital increase in September that the crisis practically pressed the pause button in this process.
The next timetable for Lufthansa’s withdrawal from the state aid provides that the group cancels the unused part of the first silent contribution by the end of the year. In February, the airline had already repaid a loan from the state development bank KfW in the amount of one billion euros. The WSF reduced its participation from 20 to 14 percent in mid-August. The state fund even made high profits. Because the value of the shares had almost tripled due to a significant jump in the price of the Lufthansa share since the entry.