Lufthansa has paid back the taxpayers of Germany by paying back its federal pandemic aid…and even done so ahead of schedule. What a novel concept to us in the United States.
Lufthansa Repays Pandemic Loans
In the summer of 2020, the German government provided Lufthansa with a 9 billion Euro loan, which Lufthansa said was necessary for it to survive. But it was a loan…not a grant…and just to be sure, the German government took a 20% stake in Lufthansa, whose parent company includes Austrian Airlines, Brussels Airlines, Eurowings, and SWISS.
As it turned out, Lufthansa only ended up accepting 3.8 billion Euros in aid. It credits a recent surge in demand for its ability to pay back the debt early (it also just reported it first quarterly profit since the pandemic started):
“The repayment was made much earlier than originally planned. This was made possible primarily by the rising demand for air travel, the fast restructuring and transformation of the Lufthansa Group and the capital markets’ confidence in the company.”
Lufthansa also credits the aid for protecting 100,000 jobs. CEO Carsten Spohr said:
“On behalf of all Lufthansa employees, I would like to thank the German government and the German taxpayers. In the most serious financial crisis in our company’s history, they have given us a perspective for the future. This has enabled us to save more than 100,000 jobs. We are proud that we were able to keep our promise earlier than expected and repay the German financial aid.”
The German government currently owns a 14% stake in Lufthansa in its Economic Stabilization Fund (ESF) and will sell off its remaining share by October 2023.
It’s been a historic day – we have repaid all the financial aids. We say #ThankYou for your trust, loyalty and support. 🙏 #TogetherAgain #LufthansaAndYou ✈️ pic.twitter.com/mTr9oU7eWU
— Lufthansa News (@lufthansaNews) November 12, 2021
In the USA, 70% of airline payroll support was in the form of taxpayer-funded grants, which do not have to be repaid.
CONCLUSION
What a novel concept: an airline accepts taxpayer-funded government money…and actually pays it back in full. Well done, Lufthansa. If only your U.S. counterparts would follow your example. But corporate socialism is a beautiful thang in the land of the free and home of the brave.
Impressive. Unlike in Brazil where it would take decades to see Azul repayments
Meanwhile, In the U.S……….
But at least US carriers haven’t suffered operational interruptions, employee shortages, or service reductions.
Lol
Since this was done under a Republican administration (as were the bank, Fannie/Freddie and auto bailouts of 2008), I think its safe to say that the GOP is the party of socialism.
That being said, the bank and Fannie/Freddie bailouts were profitable for the US Treasury so there is that. One way the GOP has funded lower taxes is by nationalizing businesses to earn dividend income.
Well done LH.