German ministries welcome Lufthansa's early bailout aid repayment

·2 min read
FILE PHOTO: A Lufthansa McDonnell Douglas MD-11 cargo aircraft is pictured at Frankfurt airport

By Miranda Murray and Zuzanna Szymanska

BERLIN (Reuters) - Germany's finance and economy ministries on Friday welcomed the early repayment by flag carrier Lufthansa of bailout aid it received during the coronavirus crisis.

The news showed Germany's federal government made the right decision when it helped Europe's largest airline group during the most difficult situation in its history, Economy Minister Peter Altmaier told a news conference.

"The whole thing faced a lot of criticism at the time. Many believed the government would never see the funds again. In the end, Lufthansa would become a state company," Altmaier said.

"All of these fears, I would like to make this very clear again today, have not materialised. Lufthansa made an effort. It used the state money to get through the most difficult months of the pandemic," he said.

Lufthansa Group was saved from bankruptcy during the coronavirus pandemic by Germany, Switzerland, Austria and Belgium with 9 billion euros ($10.30 billion) in financial support approved by the European Commission in June 2020.

Lufthansa only drew 3.8 billion euros out of that amount and on Friday, it said it had repaid the last 1 billion euros.

"It shows it was important and right for the state to help the company through difficult times and thereby secure thousands of jobs," Finance Minister Olaf Scholz, who is on course to become Germany's next chancellor, said in a statement.

Rising demand for travel, downsizing and the return of the market's confidence in the airline helped it repay the loans faster than expected, Lufthansa said.

"On behalf of all Lufthansa employees, I would like to thank the German government and the German taxpayers," said Lufthansa CEO Carsten Spohr.

The ministries said the country's pandemic stabilisation fund's remaining stake of about 14% in Lufthansa would be sold by October 2023 at the latest.

($1 = 0.8736 euros)

(Reporting by Miranda Murray and Zuzanna Szymanska; Editing by Riham Alkousaa, Thomas Escritt, Kirsten Donovan)

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