Lufthansa Looks To Repay State Aid

German flag carrier and Star Alliance founding member Lufthansa has laid out a timescale for its plan to repay billions of Euros of state aid. It hopes to have the matter wrapped up within the next few months, with the deadline being the country’s next federal election.

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The German government agreed on a €9 billion state aid package for the German flag carrier last April. Photo: Vincenzo Pace | Simple Flying

A multi-billion-dollar aid package

As Simple Flying first reported over a year ago, Lufthansa has been a significant beneficiary of state aid amid the ongoing coronavirus pandemic. In April 2020, the German government agreed on a €9 billion ($10.7 billion) assistance package for its flag carrier. However, this deal was the subject of criticism from various parties at the time and later.

For example, a union for flight attendants at Lufthansa complained that the conditions of the deal didn’t do enough to protect employees. Meanwhile, low-cost carrier Ryanair, which competes with Lufthansa on several routes, went as far as accusing the German flag carrier of being addicted to ‘state aid.’ Complaints have also arisen more recently.

Indeed, German leisure carrier Condor also made complaints to the EU about Lufthansa’s aid package this year. Specifically, it argued that Lufthansa’s cancelation of the co-operation agreement between the airlines violates the conditions of its aid package.

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Lufthansa’s aid package drew criticism from various parties. Photo: Vincenzo Pace | Simple Flying

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To be paid off by late-September

Earlier this month, Simple Flying reported that the airline was making plans to repay the remaining state aid that it received last year. It had already paid off around €1 billion (1.2 billion), having reportedly used €2.3 billion ($2.7 billion) of the package. At the time of these initial reports, Lufthansa was yet to set out a timeframe for its repayment plans.

However, according to airliners.de, one has now emerged. The German flag carrier hopes to complete its repayments by the country’s next federal election. This is set to occur on September 26th, 2021. CEO Carsten Spohr announced this earlier today at Germany’s Nationalen Luftfahrtkonferenz (National Aviation Conference), stating:

We were one of the first companies that was saved by the federal government. We also want to be one of the first to repay our aid package – hopefully before the federal election.”

Lufthansa Looks To Repay State Aid
Lufthansa hopes to have its aid paid off by late September. Photo: Vincenzo Pace | Simple Flying.

A brighter summer ahead?

The fact that Lufthansa required so much aid underlines how challenging the global health crisis has been, even for established flag carrier airlines like itself. However, things may be looking up for the company. Indeed, one of the reasons that has allowed Lufthansa to set out a timeframe for its aid repayments is the fact that a capital increase is on the way.

There are also clearer skies ahead for the German flag carrier from an operational perspective. For example, is it inching ever closer to the launch of its long-haul leisure brand, Eurowings Discover. This new airline is set to hit the skies next month, on July 24th. A boom in bookings has also seen Lufthansa schedule widebodies on summer flights to Mallorca.

What do you make of Lufthansa’s repayment plans? Have you flown with the German flag carrier since the pandemic began? Let us know your thoughts and experiences in the comments.
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