Lufthansa repays government bailout ahead of schedule

Lufthansa repaid the last of its E9b bailout ahead of schedule, paving the way for the German government to sell its stake in the airline group for a significant profit. A recovery in international travel and successful refinancing measures allowed the airline to return the taxpayer cash, it said in a statement Friday. The state stands to net close to $1b in profit once it sells its 14% holding over the next two years. “It was good business for the treasury,” German finance minister Olaf Scholz said. “Smart politics pays off.” The outsize profit marks a victory for Scholz, who is poised to succeed Angela Merkel as chancellor once coalition negotiations conclude. He and his deputies drove a hard bargain in negotiations with Lufthansa, mindful of bank bailouts during the financial crisis that shouldered taxpayers with heavy losses. For the airline, the repayment marks the latest step toward a return to normal after the coronavirus pandemic grounded much of its fleet and pushed it to the brink of bankruptcy in 2020. Lufthansa expects to restore 70% of its pre-pandemic capacity next year as the crisis wanes and intercontinental routes reopen. Still, the airline has borrowed heavily from private creditors to replace the aid. Its plan to secure pay cuts for its pilots has met with resistance from the powerful cockpit union. Lufthansa reduced its fleet and committed to investing less in new aircraft, moves that could leave its western European empire vulnerable to cash-rich discounters.<br/>