Rescue in the corona crisis: Lufthansa pays back German state aid

Air traffic collapsed in the Corona crisis – and with it Lufthansa’s business. The airline was saved with billions in aid from several countries. The group has now repaid the German direct aid.

Lufthansa has fully repaid the direct German state aid granted in the Corona crisis. On Friday, one billion euros went to the Federal Republic’s Economic Stabilization Fund (WSF), and funds that were not called up were also canceled, Lufthansa announced.

State remains the largest shareholder

During the Corona crisis and the associated collapse in business, Lufthansa negotiated a total of nine billion euros in a government rescue package with the federal government and the EU Commission: three billion euros as a loan from the state development bank KfW and six billion euros from the WSF. According to its own information, the group used around 3.8 billion euros.

This includes around 306 million euros, with which the state WSF built up its stake in the company. He is currently the largest shareholder in Lufthansa with a good 14 percent. According to earlier information, the fund intends to sell the shares in five months at the earliest – but no later than October 2023.

The group had already redeemed a loan from the state development bank KfW in the amount of one billion euros early in February. In October he paid the WSF 1.5 billion euros, now another billion.

Demand is picking up again

The repayment would have enabled “the increasing demand for air travel, the rapid restructuring and transformation” as well as “the confidence of the capital markets in the company”, said Lufthansa. The group has issued several bonds since November 2020, borrowing money from investors; In October, the airline also issued new shares, collecting almost 2.2 billion euros.

Lufthansa boss Carsten Spohr now thanked the federal government and taxpayers and declared: “In the worst financial crisis in our company’s history, they gave us future prospects. As a result, we were able to save more than 100,000 jobs.” Nevertheless, the group cut more than 30,000 jobs worldwide during the crisis.

With the repayment of the state aid, there are business restrictions for Lufthansa. Takeovers and dividend payments will be possible again, as will bonus payments to managers.

“The crane has a lot of buoyancy again”

The federal government welcomed the rapid repayment of the state aid decided in May 2020. “The crane has a lot of buoyancy again,” emphasized Finance Minister Olaf Scholz (SPD). It was important and right that the state helped the company through the difficult times and thus secured thousands of jobs. Scholz added: “And it was good business for the state treasury – because it looks like the state will make a plus at the end of its commitment.”

Economics Minister Peter Altmaier (CDU) said the early repayment shows that the instruments used in the corona pandemic “work” and “provide the right incentives for a quick return to independence”. The WSF worked as a crisis instrument.

In addition to the money from Germany, Lufthansa had also received corona aid from other countries. The state aid from Austria, Belgium and Switzerland has not yet been paid back, as a Lufthansa spokesman said at the request of the dpa news agency.