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Lufthansa back in private hands as Germany sells rescue stake

BERLIN: Lufthansa said Wednesday the German state had sold the stake it took in the airline as part of a rescue package at the peak of the Covid pandemic, and booked a healthy profit in the process.

In the spring of 2020, borders were shutting worldwide, forcing airlines everywhere to ground planes and put staff put on forced leave.

To save Lufthansa from bankruptcy, the German government took a 20-percent stake in the group under a nine-billion-euro (dollar) state aid package.

Under the deal, the government agreed to sell the stake by October 2023.

But with the airline’s finances stabilising as travel resumed, Berlin was able to start selling its holdings as early as November last year.

Lufthansa said the remaining 6.2 percent of the share capital was sold on Tuesday.

“This brings the stabilisation of Lufthansa to a successful conclusion,” said Carsten Spohr, its CEO.

“The stabilisation of Lufthansa was successful, and is also paying off financially for the German government and thus for the taxpayer,” he added.

The state paid 306 million euros for the stake and sold it for 1.07 billion euros — a profit of 760 million.

“With this gratifying balance, the WSF’s (Economic Stabilisation Fund’s) participation comes to an end and the company is once again in private hands,” said Jutta Doenges, who ran the fund.

Among investors who snapped up the shares was German billionaire Klaus-Michael Kuehne, who owns the logistics giant Kuehne + Nagel.

With the purchase, he raised his stake to 17.5 percent from 15 percent previously, his office said in a statement.

Lufthansa in August reported its first net profit since the pandemic, booking 259 million euros in earnings for the second quarter as it benefited from pent-up demand for travel.

The group — which includes Eurowings, Austrian, Swiss and Brussels Airlines — made huge net losses of 6.7 billion euros in 2020 and 2.2 billion euros in 2021 as the pandemic shut down large parts of the airline industry.