Lufthansa (LHAB) (LHA) has repaid all the financial aid it received from the German government earlier than expected.
Germany’s largest airline said it was able to pay back the money and cancel any undrawn funds sooner than expected thanks to rising demand for air travel, its own cost-cutting measures and its own fund-raising efforts on the capital market.
“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.”
Lufthansa (LHAB) (LHA) said that it repaid the Silent Participation II of the German government’s Economic Stabilization Fund, which amounted to €1 billion, on November 12, 2021.
Lufthansa (LHAB) (LHA) previously repaid €1.5 billion from Silent Participation I on October 12, 2021 and a loan from state bank KfW of €1 billion in February 2021.
The German government acquired a stake of approximately 14% in Lufthansa (LHAB) (LHA) under the bailout, and has committed to sell this shareholding by October 2023 at the latest.
As countries have eased travel restrictions and demand has returned, Lufthansa (LHAB) (LHA) has been able to return to the capital markets for financing, rather than having to rely on government help.
On November 9, 2021, it issued a €1.5 billion bond, its third bond of the year. It also completed a €2.2 billion capital increase in October 2021.
CEO Spohr added: “Lufthansa (LHAB) (LHA) was able to rely on Germany and Germany can rely on Lufthansa (LHAB) (LHA). Many challenges remain. Our ambition is to strengthen our position among the world’s leading airline groups. To this end, we will consistently continue the restructuring and transformation of the company.”