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.

A Lufthansa plane taking off.
Photo: picture alliance/dpa | Henning Kaiser

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.

READ ALSO: Germany’s Lufthansa says 30,000 jobs at risk over pandemic

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Germany’s Deutsche Bahn to raise ticket prices by almost five percent

The cost of long-distance train travel in Germany is to go up significantly from December.

Germany's Deutsche Bahn to raise ticket prices by almost five percent

The price of tickets for long distance rail services run by Deutsche Bahn (DB) in Germany are to go up by an average of 4.9 percent this winter, it has emerged. 

The company said the hikes, which will come into force from December 11th, are in response to high inflation.

Some tickets will see an even higher increase. The price of Flex tickets, which aren’t tied to a specific train and can be cancelled, will increase by an average of 6.9 percent.

The cost of BahnCards 25, 50 and 100, which frequent travellers can use for discounted rates, are also going up by around 4.9 percent.

Super Saver and Saver fares – Sparpreise – are, however, staying the same. They start at €17.90 (or €12.90 for people who are 27 or younger), although these tickets are not offered on every train and come with some restrictions.

Seat reservations will also remain at the same level. It costs €4.50 for second-class seat reservations.

The changes will apply to DB’s long-distance trains – Intercity and Intercity Express (IC and ICE).

READ ALSO: German rail operator plans huge modernisation 

The company said the hikes were happening because of inflation. Like many other companies, Deutsche Bahn was “forced to react to the massive inflation by adjusting its prices,” but the firm said this was still well below the current inflation rate of eight percent.

DB added that the German Tariff Association said at the beginning of September that regional services would see a price increase of four percent on average.

The new long-distance timetable – which will apply from December 11th – can be booked in advance from October 12th, according to Deutsche Bahn.

Up to and including December 10th, the new offers can still be booked at the old price.

Despite major problems with the punctuality of its trains, Deutsche Bahn has recently been able to significantly increase its passenger numbers back to the level it reached before the Covid crisis. However, as one of the biggest consumers of electricity in Germany, it has also been hit hard by rising energy costs. The additional costs for the coming year have been put at two billion euros, said the firm. 

It comes as federal and state leaders are widely expected to agree to a new nationwide successor to the €9 euro ticket, which would cover all regional public transport – including DB’s regional trains – around the country.

According to Transport Minister Volker Wissing (FDP), the government is aiming to introduce the new travel offer by January 1st, 2023. 

READ ALSO: Germany sets out plans for €49 public transport ticket in October