Lufthansa pays back German bailout early - but job cuts still stand
The aviation giant has paid back a German government bailout it says saved 100,000 jobs at the height of the first Covid wave in 2020. But 3,000 more job cuts are still planned.
Lufthansa said on Friday that it has finished repaying a government bailout worth nine billion euros that saved it from bankruptcy at the height of pandemic travel curbs.
The company says the repayment also came "much earlier than planned," thanks to cost-cutting measures and rising travel demand after countries eased their coronavirus restrictions.
By October 2023, the German government will sell the stake it took in Lufthansa as part of its rescue deal by October 2023, which sits at about 14 percent.
Lufthansa CEO Carsten Spohr thanked the Merkel government and German taxpayers for helping the company through "the most serious financial crisis in our company's history," saying over 100,000 jobs were saved.
The government agreed last June to keep Lufthansa flying with credit line, but the group ended up using only around 3.8 billion euros.
Finance Minister Olaf Scholz, poised to replace Merkel as chancellor, welcomed the early repayment and said the government was likely to make a profit with the sale of its Lufthansa stock.
"Clever politics pays off," he said.
The group - which also includes Swiss, Austrian and Brussels Airlines - is in the midst of a major job-cutting programme which has seen over 30,000 positions shed since the start of the pandemic, out of 140,000 jobs globally.
The company still plans to axe 3,000 more jobs, it said earlier this month.
Lufthansa posted an operating profit last quarter for the first time since the beginning of the pandemic.