Lufthansa returns to the private sector as the government sells a rescue share

Berlin (Germany) (AFP) – Lufthansa said on Wednesday that the German state had sold the stake it took in the airline as part of a rescue package at the height of the Covid pandemic, and made a good profit in the process.

In the spring of 2020, borders were closed around the world, forcing airlines everywhere to land planes and putting employees on mandatory leave.

To save Lufthansa from bankruptcy, the German government bought a 20 percent stake in the group under a nine billion euro (dollar) government aid package.

(File photo) An Airbus A319 of German airline Lufthansa stands at Frankfurt Airport in Frankfurt am Main, western Germany, on September 2, 2022, as pilots call for a strike affecting passenger airline Lufthansa and Lufthansa Cargo after payment negotiations with the airline. The German airline collapsed. (Photo by Andre Payne/AFP)

Under the agreement, the government agreed to sell the stake by October 2023.

But with the airline’s financials stabilizing as travel resumes, Berlin was able to start selling its holdings in November of last year.

Lufthansa said the remaining 6.2 percent of the capital was sold on Tuesday.

“This is leading Lufthansa’s stability to a successful outcome,” said Carsten Spohr, CEO of the company.

He added that “Lufthansa’s stabilization has been successful, and it is also paying off financially for the German government and therefore for the taxpayers.”

The state paid 306 million euros to buy the stake and sold it for 1.07 billion euros – with a profit of 760 million euros.

“With this pleasant balance, the participation of the WSF (Economic Stability Fund) ends and the company is once again in private hands,” said Juta Doings, who managed the fund.

Lufthansa in August reported its first net profit since the pandemic, and booked 259 million euros in profit for the second quarter as it benefited from pent-up travel demand.

The group – which includes Eurowings, Austrian, Swiss and Brussels airlines – incurred huge net losses of 6.7 billion euros in 2020 and 2.2 billion euros in 2021 as the pandemic shut down large parts of the airline industry.

© AFP

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