Lufthansa has taken an important step out of the crisis. On Friday, November 12, she announced that she had repaid the last public assistance received during the health crisis, which was 1 billion euros.This weekend, when asked by several media, the head of the group Carsten Spohr said “Relaxed and proud.” Lufthansa was grounded at the beginning of 2020 due to the Covid-19 pandemic. After experiencing the best three years in its history, Lufthansa was on the verge of bankruptcy. Lufthansa’s rescue can only be attributed to large-scale intervention by the state.
Lufthansa’s rescue plan was completed on May 25, 2020, including a package of assistance guaranteed by Berlin, Austria, Switzerland and Belgium, totaling 9 billion euros. The company used a total of 3.8 billion euros and has now been reimbursed.
Change of creditors
Three factors enable the company to achieve this transformation. The first is the successful issuance of 1.5 billion euros of bonds in the market a few days ago. Therefore, Lufthansa did not get rid of the debt, it just changed the creditors. Mr. Spoel reiterated that for the management of a company, debt to the market is better than debt to the country. For example, the company is therefore free to make business acquisitions, but can also start paying bonuses and dividends again.
From the first day of opening, business travel that has been blocked for the past two years began to grow strongly
In addition, the activity has improved significantly. The removal of restrictions on access to the United States, a market that is very important for German companies, has led to a surge in demand. From the first day of opening, business travel, which has been blocked for the past two years, has seen strong growth. The freight business took advantage of the current interruption of ship deliveries and achieved record results. Lufthansa announced that its revenue in the third quarter had doubled compared with the same period last year, reaching 5.2 billion euros, and operating profit also declined slightly, reaching 272 million euros.
The third element is the sharp drop in operating costs. During the crisis, the company organized a huge social program: on the basis of voluntary resignation, it has laid off 30,000 employees in recent months. The management’s stated goal is to keep employees above 100,000. Currently, the company has 107,000 employees.
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