Germany makes E760m profit from Lufthansa rescue

The German government has reaped a E760m profit from its rescue of Lufthansa at the height of the coronavirus pandemic, underlining the recovery of the country’s flag carrier. Germany’s Economic Stabilisation Fund spent €300mn on shares in Lufthansa in 2020 as part of a E9b rescue package for the airline, whose revenues collapsed as the governments closed down air travel in an effort to stop the spread of Covid-19. The government has been gradually trimming its 20% stake and late on Tuesday disclosed that it had sold its remaining 9.92% holding. It has made proceeds of more than E1b from selling its entire stake, comfortably exceeding the size of its investment. Lufthansa repaid the last of its bailout ahead of schedule in November last year, paving the way for Berlin to dispose of its stake ahead of the October 2023 deadline it had set. As the threat from the pandemic recedes, Lufthansa is on track to make its first annual profit since Covid-19. It generated a net profit of E259m in the three months to the end of June, compared with a loss of E756m in the same period last year. Lufthansa CE Carsten Spohr said that “the stabilisation of Lufthansa was successful, and is also paying off financially for the German government and thus for the taxpayer”. Its shares have significantly outperformed European rivals this year in the face of rising fuel prices and recession fears. Lufthansa has fallen 10%, while Air France-KLM has dropped 30%, British Airways owner IAG is down 33% and easyJet 43%. The rescue of Lufthansa was one of several for airlines across Europe, including in France and Italy, as governments stumped up billions of euros.<br/>