Before it broke off business overnight due to Corona, Lufthansa was a healthy and profitable company.
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(Photo: Imago)
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Government aid to large publicly traded corporations is a tricky business, even in the worst economic crisis since the Great Depression. Every time there is speculation about new cases, it is said – and rightly so: does it really have to be?
So now again at Thyssen-Krupp and Tui. Especially since it would not be the first financial injection from Berlin for the travel company Tui. While there is speculation about state aid for some, the Lufthansa, which was saved from Berlin in May with nine billion euros, a convertible bond of 600 million euros that was oversubscribed several times. It was so well received by investors that the airline lowered the interest rate and increased the total volume.
Corona or not. One wonders whether the taxpayer’s money ends up in the right place, or rather in the right company. Of course, each case is different and has to be assessed individually. At Lufthansa, however, even those who consider state aid, whether in the form of a loan or (even worse) in the form of shares, to be the devil’s stuff should have some respect.
Before Lufthansa broke its business overnight due to Corona, Lufthansa was a healthy and profitable company. And above all one with a viable business model and a future. Of course, no one knows if, once the pandemic is under control, people will ever fly as much as before.
But one thing is clear: Lufthansa has a good chance of surviving the competition and growing again even in its shrunken format. State aid saved the airline from the first deep corona shock. But investors also believe in this. Otherwise they wouldn’t give the company any money now and buy shares again.
It looks similar with Adidas out. When the stores had to close in the first lockdown, it had the Dax-Group secured loans of over three billion euros, 2.4 billion of which came from KfW. According to Adidas, the entire credit line was redeemed in October. Instead, the company has obtained loans from private banks and through bonds. Here too, trust seems to be returning.
In contrast, the Thyssen-Krupp case is quite different. IG Metall has been drumming for weeks for the federal government or the state of North Rhine-Westphalia to join. The politicians, whether in Berlin or Düsseldorf, are understandably likely to have great difficulty in justifying state aid or even participation. The group does not suffer so much from Corona, but above all from a constant change of strategy and the disagreement of the shareholders.
More: Lufthansa places convertible bond for 600 million euros.
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