A Billionaire Is The Lufthansa Group’s New Largest Shareholder

A March 26th report indicates that German industrialist Heinz Hermann Thiele has increased his ownership of the Lufthansa Group to become the airline companies’ biggest single shareholder.

Heinz Hermann Thiele doubles his stake in the Lufthansa Group. Photo: Lufthansa

According to the aviation website, CH-Aviation quoting a stock market filing, the 78-year-old Munich-based billionaire has increased his stake in the Lufthansa Group from 5.29% to 10.01%.  The decision to almost double his stake in the airline group follows a steep decline in the company’s share price due to the coronavirus pandemic which started in Wuhan, China.

Lufthansa shares have lost a third of their value

The purchase of the new shares, which was completed on March 16th, 2020, saw Thiele increase his ownership of the Lufthansa Group by 22.6 million shares or in monetary terms 195.5€ million (US$212 million).

Shares in all airlines have gone down. Photo: Lufthansa

Shares in the Lufthansa Group, just like in all airline companies have plummeted following the COVID-19 crisis with the current price as of March 25th, trading at 9.51€ ($10.31) down a third in price from the February 19th, 2020, price of 15.40€ ( $16.70).

Warren Buffet snapping up Delta stock

Perhaps Thiele was taking a lead from Warren Buffet’s multinational conglomerate holding company Berkshire Hathaway and its purchase of one million shares in Delta for $45 million. Buffet’s purchase was made following intense coronavirus-driven selloffs earlier this month. Thiele expects a bounce back on the horizon once the crisis is over and things hopefully return to normal.

In a letter written to shareholders back in 1986 and recently revived by Business Insider regarding the possibility of pandemics, Buffet is quoted as saying:

“Occasional outbreaks of those two super-contagious diseases, fear and greed, will forever occur in the investment community”

“The timing of these epidemics will be unpredictable,” he continued. “And the market aberrations produced by them will be equally unpredictable, both as to duration and degree.”

“Therefore, we never try to anticipate the arrival or departure of either disease,” Buffett added. “Our goal is more modest: We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

Buffet’s decision to buy shares in Delta, rather than American Airlines, United, and Southwest, which he already owns, maybe because Delta does not own any Boeing 737 MAX aircraft meaning that Delta, unlike its rivals, did not lose hundreds of millions of dollars following the aircraft’s grounding.

Who is Heinz Hermann Thiele?

Meanwhile, Thiele, who grew up in hard times himself, is not a skittish man when it comes to making investments. With the knowledge that the German government would never allow Lufthansa to fail sees his investment as a wise decision.

Most of Lufthansa’s fleet is grounded due to COVID-19. Photo: Lufthansa

With an estimated real net worth of $12.6 billion, Thiele is an old school entrepreneur who owns Knorr-Bremse AG, one of the world’s leading manufacturers of braking systems for rail and commercial vehicles along with German transport technology maker Vossloh.

Currently, with borders closed and airlines grounding their fleets due to the on-going coronavirus pandemic, many people are predicting that some airlines will go bust.

Thiele and Buffet, however, have the financial resources to snap up a bargain when they see it and would not suffer greatly even if it turned out to be a wrong decision.