Lufthansa (LHAB) (LHA) has paid back all of the German government’s financial aid earlier than expected.
Due to increased demand for air travel, its own cost-cutting measures, and its own capital-raising activities, Germany’s largest airline said it was able to repay the money and cancel any undrawn funds sooner than projected.
“On behalf of all Lufthansa (LHAB) (LHA) employees, I would like to thank the German government and the German taxpayers,” Lufthansa (LHAB) (LHA) chief executive Carsten Spohr said in a statement on November 12, 2021. “In the most serious financial crisis in our company’s history, they have given us a perspective for the future.”
On November 12, 2021, Lufthansa (LHAB) (LHA) announced that it had repaid the German government’s Economic Stabilization Fund’s Silent Participation II, which totaled €1 billion.
On October 12, 2021, Lufthansa (LHAB) (LHA) repaid €1.5 billion from Silent Participation I, as well as a €1 billion loan from state bank KfW in February 2021.
Under the bailout, the German government acquired a 14 percent interest in Lufthansa (LHAB) (LHA), which it has promised to sell by October 2023 at the latest.
As travel restrictions have been removed and demand has increased, Lufthansa (LHAB) (LHA) has been able to return to the capital markets for funding rather than relying on government assistance.
It issued a €1.5 billion bond on November 9, 2021, its third issuance of the year. In October 2021, it also completed a €2.2 billion capital increase.
“Lufthansa (LHAB) (LHA) was able to count on Germany, and Lufthansa (LHAB) (LHA) can rely on Germany,” said CEO Spohr (LHA). There are still many obstacles to overcome.
Our goal is to consolidate our position as one of the world’s top airline groups. To that purpose, we will continue to restructure and transform the organization on a constant basis.”