German state profits from airline bailout

GERMAN taxpayers have made a €760m (£660m) profit from the bailout of Lufthansa during the pandemic after the national airline was returned to private ownership.

Berlin pumped €9bn into the stricken flag carrier in 2020 as it grappled with the abrupt halt in global air travel. The state initially took a 20pc stake in the business as well as handing bosses loans to keep the airline afloat.

The shares cost €300m, but generated more than €1bn in proceeds as they were gradually sold down. The final tranche was offloaded yesterday.

Klaus-michael Kühne, the billionaire behind sea freighter Kühne + Nagel and Germany’s richest man, snapped up the remaining stake offered by the government. Mr Kühne is now Lufthansa’s biggest investor, owning 17.5pc of the DAX company.

The decision by EU countries to bankroll their airlines during the pandemic contrasted sharply with support given to UK carriers. Air France and Dutch airline KLM also received support from their respective governments.

Rishi Sunak, the then chancellor, initially signalled that support would be available to airlines during the pandemic but the Government refused to take equity stakes.

The UK’S refusal to offer help the industry beyond generic Covid loans was a significant headache for Sir Richard Branson’s Virgin Atlantic, which was taken to the brink of bankruptcy before striking a rescue deal with creditors later in 2020.