The German government plans to sell up to a quarter of its 20% stake in Lufthansa over the coming weeks, the state finance agency said on Monday, as the airline’s actions to weather the Covid-19 crisis started to pay off.
The state spent €300m as part of a bailout for the German carrier as the aviation sector took a battering from the coronavirus crisis with passenger traffic coming to a virtual standstill.
Lufthansa had received a €9bn package from Germany’s economic stabilisation fund (WSF), which was set up to help companies to ride out the pandemic.
The WSF has said it would sell the complete stake, which is currently worth more than €1bn, before the end of 2023.
Lufthansa plans to issue new shares, probably before parliamentary elections next month, to help it to return bailout money to taxpayers. Shareholders have approved a potential capital increase of up to €5.5bn.
The airline last December agreed a cost-cutting programme with the pilots union Vereinigung Cockpit (VC) to secure jobs until end-March 2022, adding that the deal could help save up to €450m as it battles the impact of global travel restrictions and grounded fleets amid the coronavirus pandemic.
It added that the deal includes an extension of shortened working hours in 2021 under the government’s Kurzarbeit scheme as well as a reduction in working hours with corresponding salary cuts and the suspension of collective pay increases.
