BERLIN, Oct 12 — Lufthansa said yesterday it had paid back in advance €1.5 billion (RM7.2 billion) of state aid obtained last year at the height of the Covid-19 pandemic, which decimated air travel.
The payment comes on the back of a €2.2 billion (RM10.6 billion) capital increase as the German carrier, in which the German state has a 14 per cent stake, banks on a revival of demand for air travel next year.
Lufthansa added it also intends to pay off an unused loan tranche worth €1 billion by the end of the year.
The carrier had already paid back a state loan of €1 billion in February and has bounced back following a successful €2.14 billion capital increase launched last month.
Last June, Lufthansa shareholders overwhelmingly approved a €9 billion government bailout as the aviation sector found itself buffeted by coronavirus headwinds that brought flying to a virtual halt.
“Today, we are keeping our promise and paying back a large part of the stabilisation funds earlier than expected. We are increasingly confident about the future. More and more countries are opening their borders” as demand returns, said chief executive Carsten Spohr.
“We are very grateful that Deutsche Lufthansa AG was stabilised with tax money in the most challenging of times. This has made it possible to preserve more than 100,000 jobs and secure them for the future.”
Berlin stepped in June last year as the pandemic looked to threaten the future of the group which includes Austrian, Swiss and Brussels Airlines.
With the loosening of travel restrictions and a gradual return in demand, Lufthansa posted a net loss of €756 million for the second quarter of this year — half the €1.5 billion for the same period in 2020 when Covid brought global air traffic virtually to a halt.
The carrier nonetheless is maintaining a major job-cutting programme which has seen some 30,000 positions shed since the start of the epidemic.
In all, the health crisis is set to slash the carrier’s workforce by some 43 per cent since the start of the pandemic. — AFP
