Lufthansa machines at Frankfurt Airport: Many of the airline’s jets are still on the ground.
(Photo: Kai Pfaffenbach / Reuters)
In an emergency, the German state supported Lufthansa with billions in aid last year. The German airline had had a hard time feeling the effects of the Corona crisis, hardly anyone was still traveling, and global air traffic almost completely collapsed. In particular, on the routes from Europe to Asia and the USA, sometimes nothing went at all. But these routes are the big profit maker for Lufthansa.
Well, a good one and a half years after the outbreak of the pandemic, the group has repaid a larger part of the corona state aid. The airline announced that a silent participation of 1.5 billion euros had been completely redeemed. The money comes from a capital increase that brought in 2.162 billion euros and has now been completed. All aid should be reimbursed by the end of the year. The federal government had also taken a direct stake in Lufthansa, currently the share is still 14 percent. The participation must be surrendered within 24 months from the time the aid is fully repaid, according to the agreement when the federal government joined the company.
The Lufthansa share was on Tuesday at three percent in the red at around 5.80 euros. The new shares have been traded on the Frankfurt Stock Exchange since this week. The capital increase is now complete.
“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.” More and more countries are opening their borders and the demand for air travel is growing daily. Lufthansa had received a total of 2.5 billion euros from the Economic Stabilization Fund (WSF) through two silent participations. A loan from the state development bank KfW in the amount of one billion euros had already been repaid early in February 2021.
The repayment will be made much faster than expected at the start of the previous year. International air traffic has not recovered as quickly as planned. The US did not open its borders to all air travelers in the summer, but is only doing so now. Business travelers have always been the largest source of income for the airline, which also includes Swiss and Austrian Airlines.
State aid was also costly for Lufthansa. The aid loans were given high interest rates. In the first year Lufthansa had to pay four percent for this, this year five percent, the rate would have increased further. At the same time, conditions had to be accepted, for example with regard to bonuses for managers.