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Lufthansa slowly on its way back from loss, seeks to raise cash

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Rayyan Alhassan is a graduate of Journalism and Mass Communication at Sikkim Manipal University, Ghana. He is the acting Managing Editor at the Daily Nigerian newspaper, a position he has held for the past 3 years. He can be reached via [email protected], or, or @Rayyan88 on Twitter.
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Lufthansa halved its losses in the second quarter, compared with the pandemic-hit second quarter of last year, the German airline announced on Thursday.

This emerged from the deep crisis in the sector caused by the Coronavirus pandemic.

Chief executive Carsten Spohr said that the airline planned to increase its flights to half pre-pandemic levels in the third quarter.

The company also announced that it had drawn an additional 1.5 billion euros (1.8 billion dollars) in state aid from the German government. Lufthansa has now taken up 4 billion euros of the 9 billion euros put up by four countries to see it through the crisis.

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The company is preparing to access the markets for an increase in its capital, with the aim of paying off the debt, chief financial officer Remco Steenbergen confirmed.

Lufthansa aims to raise 5.5 billion euros of new equity in a move that has been approved by shareholders.

At the end of the quarter, it had liquid assets of 11.1 billion euros.

With the loss for the quarter coming in at 756 million euros, Spohr said the company aimed to reduce its losses for the full year, before interest and taxes, in comparison to last year.

This brings the loss for the first half to 1.8 billion euros, after a minus of as much as 3.6 billion last year. Staff cuts are proceeding, Spohr said.

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The flight schedule was to be increased to around 50 per cent of the pre-crisis level.

During the full year, flights are expected to reach around 40 per cent of the levels seen in 2019.

The opening up of the North American market remains key to the recovery.

To date, travelers from the European Union are restricted from travelling to the United States.

Positive contributions came in from Lufthansa Cargo, Lufthansa Technik, based on aircraft maintenance, which was again growing, as well as the LSG catering unit, which was up for sale.

Spohr and management were focused primarily on liquidity, which was 10.6 billion euros at the end of March, in part thanks to various tranches of state aid.

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For the first time since the crisis, the cash flow was positive, with bookings for the months ahead boosting the figure to 784 million euros.

Spohr praised efforts across the airline to cut costs.

“The fact that more than 30,000 colleagues have left hurts all of us, but is essential for saving the more than 100,000 remaining jobs,’’ he said. (dpa/NAN)


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