The German airline Lufthansa has taken an important step out of the crisis. Friday, November 12, she announced that she had repaid the last tranche of public aid received during the health crisis, or 1 billion euros. Asked this weekend by several media, Carsten Spohr, the director of the group, said “Relieved and proud”. Grounded in early 2020 because of the Covid-19 pandemic, on the verge of bankruptcy after having experienced the best three years in its history, Lufthansa owed its salvation only to massive intervention by the State.
The Lufthansa rescue plan, completed on May 25, 2020, included a package of aid to the tune of 9 billion euros guaranteed by Berlin, Austria, Switzerland and Belgium. 3.8 billion euros in total were used by the company, now reimbursed.
Change of creditors
Three factors enabled the company to make this turnaround. The first is the successful placement, a few days ago, of a bond on the markets, in the amount of 1.5 billion euros. Lufthansa therefore did not get out of debt, it simply changed creditors. For the management of the company, repeated Mr. Spohr, it is better to be in debt to the markets than to the State. The company thus has a free hand to carry out business buyouts, for example, but also to start paying bonuses and dividends again.
Business trips, which had been prevented for almost two years, picked up strongly from the first days of opening
Added to this is a clear upturn in activity. The lifting of restrictions on entry into the United States, a very important market for the German company, led to a surge in demand. Business trips, which had been prevented for almost two years, picked up strongly from the first days of opening. And the cargo activity, taking advantage of the current disruptions in ship deliveries, is recording record results. Lufthansa announced a doubling of its revenue in the third quarter compared to last year in the same period, to 5.2 billion euros, as well as a slight operating profit, to 272 million euros.
The third element is the drastic drop in operating costs. During the crisis, the company organized a gigantic social plan: 30,000 jobs were cut in recent months, on the basis of voluntary departures. The stated objective of the management is to keep the staff above 100,000 employees. Currently, 107,000 people work for the company.
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