To those who blanketly pan “European socialism” I wonder how you feel about Lufthansa paying back its government bailout in full and now the German government completing a sale of its stake in the airline for a profit of $760 million?
While German Taxpayers Profit From Lufthansa Sale, U.S. Taxpayers Will Not See Similar Returns
Germany’s Economic Stabilization Fund has just sold its remaining 9.92% in Lufthansa at a lucrative profit. €306 million was invested and the sale generated €1.07 billion, netting a profit of over €760 million.
Furthermore, Lufthansa has paid back, in full, its €9 billion bailout.
The result: Lufthansa is again fully privatized and German taxpayers have benefited handsomely.
Meanwhile, U.S. taxpayers were fleeced left and right by U.S. airlines who convinced two presidential administrations of different parties as well as a vast majority of Congress that it needed direct support to survive.
Airline direct aid approached $50 billion during the pandemic, justified on the grounds that airline demand had cratered 90% and such support was necessary to protect essential services that the entire economy relied upon.
But even with that money and the promise that airlines would be ready to ramp up immediately when demand increased, employee attrition through early retirements and buyout offers shrunk the U.S. workforce by over 40,000 employees and left airlines struggling (and ultimately failing) to be ready for the return of demand.
Meanwhile, United Airlines and Delta Air Lines have already promised their C-level employees generous cash awards the moment CARES Act restrictions are lifted. They claim this is necessary to maintain good talent. They’ve also found millions to invest in clean energy ventures but ultimately decided they did not need any additional government loans… which would have come with more strings attached…just the bailouts.
But, wait? Didn’t the U.S. get some airline stock in return? Yes. $260 million. That’s less than 1% of the $37 billion offered to airlines in 2020 and $13 billion in 2021 by the U.S. government.
Folks, I don’t know about you, but I prefer German corporate socialism to U.S. socialism. Fares are sky high and demand is back, but U.S. airlines have virtually no obligation to compensate taxpayers for saving them during the pandemic. Meanwhile, in Germany, taxpayers have more than doubled their investment and been paid back for their airline bailout. That’s effective stewardship.