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Lufthansa to repay government 'as quickly as possible'

June 1, 2021

Germany's largest airline has said it is on track to recovery as COVID-19 infection numbers drop. Demands for flights had increased more than tenfold in May, the group said.

Lufthansa flight takes off
"When and how we can fully stand on our own two feet again also depends on how the pandemic develops," says Lufthansa Image: Jörg Halisch/imago images

Germany's national carrier Lufthansa has said it wants to repay the government  "as quickly as possible" after it announced a record loss of €6.7 billion ($8 billion) in the COVID-19-stricken year of 2020. 

The airline's CEO Harry Hohmeister on Tuesday told the newspapers of Germany's Funke media group that Lufthansa would rather finance itself again on the capital market.

Of the up to €9 billion made available in bridging loans by the state, Lufthansa has so far made use of around €2.3 billion of the total, and has already repaid €1 billion. The German government also acquired 20% of Lufthansa's shares for a reduced price of around €300 million as part of the arrangement.

Hohmeister, however, did not give a time frame for repayment of the remaining state aid.

"When and how we can fully stand on our own two feet again also depends on how the pandemic, and therefore demand, develops," he said.

Significant rise in booking figures

Last summer, the German government had to rescue the group from insolvency.

"The federal government's stabilization package secured our solvency and gives us a strong perspective for the future," Hohmeister said, adding that the group was becoming more stable.

Lufthansa — one of Europe's largest airlines — has experienced a booking boom in recent weeks as people start seeking to arrange travel with the pandemic winding down.

"Booking numbers have been growing steadily for eight weeks, with a significant jump upwards last week. Those were the strongest seven days since April 2020," Hohmeister said. "For flights in July and August, demand is 10 to 11 times higher than four weeks ago."

On some routes, demand is even higher than before the coronavirus pandemic, according to Hohmeister.

During the coronavirus pandemic, Lufthansa had grounded hundreds of aircraft. Lufthansa therefore plans to plans to reactivate 30 to 50 additional aircraft in the next few weeks and "quickly offer sufficient seats."

The airline could also fly "with a jumbo on a route with high demand with 370 passengers instead of a short-haul aircraft with 180 guests,"  Hohmeister said.

Will Lufthansa follow the new trend?

Calls for international standards

Hohmeister also urged politicians to launch the digital COVID-19 vaccination passport by the end of June.

"Otherwise, the summer travel season will be very inconvenient for customers," he said. 

European Union countries and the European Parliament recently on a Europe-wide certificate for those who could either prove vaccination against COVID-19 or demonstrate that they had recovered from it.

Lufthansa seeks minimum price for flights

Hohmeister also said the airline was open to a recent proposal by Finance Minister Olaf Scholz, the SPD's candidate for chancellor in September's elections, to establish minimum prices for flights.

"If minimum prices mean that airlines have to cover their costs and are not allowed to charge fancy prices below the applicable taxes and fees, then that is legitimate," Hohmeister said.

In mid-May, Scholz told broadcaster ProSieben that Germany should take action against low-cost flying by setting a minimum price.

Lufthansa unfolds wings on new winds of hope

mvb/msh (dpa, AFP)