Lufthansa has repaid the last of its €9 billion bailout ahead of schedule, paving the way for the German government to sell its stake in the airline group.
The remaining €1 billion in loans were paid back on Friday, and the company cancelled the unused part of its aid package, Lufthansa said in a statement.
The repayments mean the German government can start selling its 14 per cent stake in the airline starting in six months, with a full exit seen in within two years, Lufthansa said.
Lufthansa is taking its latest step toward a return to normal after the coronavirus pandemic grounded much of its fleet and pushed it to the brink of bankruptcy in 2020.
The airline group expects to restore 70 per cent of its pre-pandemic capacity next year as the crisis wanes and intercontinental routes reopen.
While government debt has been repaid, Lufthansa borrowed heavily from private creditors to replace the aid.
Resistance
Its plan to secure pay cuts for its pilots has met with resistance from the powerful cockpit union. The carrier reduced its fleet and committed to investing less in new aircraft, moves that could leave its western European business empire vulnerable to cash-rich discounters like Ryanair and Wizz Air.
"Many challenges remain," chief executive officer Carsten Spohr said in the statement.
“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.”
The rescue saved more than 100,000 jobs, Lufthansa said. The debt secured in financial markets carries a lower interest rate than government loans that were set to rise steeply. State oversight also comes with strict restrictions on MandA activity and executive pay.
State
Once the state exits its shareholding, Lufthansa will be free to partake in the consolidation that analysts expect to shape European aviation in the wake of the pandemic.
The company, Europe's biggest airline group, has in the past been linked with bids for Scandinavian Airlines SAS, Portugal's TAP and Alitalia successor Italia Trasporto Aereo, all so-called national flag-carrier airlines like Lufthansa's Swiss and Austrian subsidiaries.
Lufthansa shares fell 0.7 per cent at lunchtime on Friday in Frankfurt. – Bloomberg