Lufthansa Group returns to private ownership model
LONDON – On September 14, the Lufthansa Group, consisting of Lufthansa, Lufthansa Cargo, Lufthansa CityLine, Eurowings, Eurowings Europe, Eurowings Discover, Air Dolomiti, Austrian Airlines, Brussels Airlines, Swiss International Air Lines and Edelweiss Air, announced that the group now has fully returned to private ownership.
Return to private ownership
When the COVID-19 virus spread rapidly across the globe, many airlines around the world had to take drastic measures in order to continue operating through a period of peak passenger numbers. low level due to many governments putting travel restrictions in place, all to reduce the amount of spread of the virus. The Lufthansa Group, also known as Deutsche Lufthansa AG, was no exception to the need to implement such measures.
Most of the measures unfortunately consisted of reducing their flight schedules to almost 0%, which resulted in the layoff of many employees, many carriers also turned to cargo operations during this two-year period when travel was severely constrained but the need for cargo movements, particularly air cargo, was at an all time high and continuing to grow rapidly.
On top of this, many operators in the aviation industry have looked to their home governments for loans or state aid to ensure operations continue, despite the fact that many of their finances were badly affected.
The Lufthansa Group turned to the Federal Republic of Germany (WSF) for an economic stabilization fund, through which the German government would hold around 20% of the group’s share capital, which operated as a state loan so that the group can maintain its operations throughout the difficult pandemic period. These 20% of shares brought in the group 306 million euros which it badly needed.
During the Covid pandemic, as funds began to rise for the Lufthansa Group, the Federal Republic of Germany began to slowly sell its shares, as part of the agreement that all shares would be from here October 2023 at the latest.
The last remaining part, some 6.2% of the share capital of the Lufthansa Group, which amounted to around 74.4 million shares, has now been sold, which means that the Lufthansa Group is now fully owned by the sector. private and no longer needs state aid, now that the brunt of the pandemic is behind them.
In accordance with the sale by the Federal Republic of Germany of its remaining stake in the Lufthansa Group, all other conditions under the Economic Stabilization Fund also subsequently ended.
Commenting on their latest announcement, Deutsche Lufthansa AG Chairman and CEO Carsten Spohr said: “On behalf of all Lufthansa employees, I would like to thank the current and former German government and all German taxpayers for their support of our Lufthansa during the worst financial crisis in our company’s history.
“The stabilization of Lufthansa was successful and also pays off financially for the German government and therefore for the taxpayer. We had already repaid the stabilization loan amounts ahead of schedule, and the WSF also sold its last remaining shares a year ahead of the deadline.
“This brings the stabilization of Lufthansa to a successful conclusion. Lufthansa is once again completely in private hands. All Lufthansa employees worldwide will continue to work hard to strengthen our position among the world’s leading airline groups, for example through a wide range of high-end products and a quality offensive.
It’s really great to see that the Lufthansa Group has repaid all of its acquired state aid, and following the sale of the remaining WSF shares, the company is back in the hands of private ownership.
All this means that the group has regained some form of stability in order to continue operating independently and financially, without the help of the German government.