Frankfurt/Paris (Reuters) – Lufthansa

LHAG.DE announced on Sunday the launch of a capital increase that will enable it to raise 2.14 billion euros in order to repay part of the financial assistance paid by the German state to survive the crisis caused by the coronavirus pandemic.

Last year, Berlin paid the airline nine billion euros for a 15.94% stake in the group owned by the Economic Stability Fund.

“We have always made clear that we will only keep the stabilization fund for as long as necessary,” CEO Carsten Spohr said in a statement.

“We are therefore proud to be able to deliver on our promise and pay the procedures faster than expected. We can now fully focus on the further transformation of the Lufthansa Group,” he added.

The flying companion said the capital increase would also allow Lufthansa to boost liquidity and restore its balance sheet at a time when the worldwide rollout of a COVID-19 vaccine offers hope of easing travel restrictions.

Based on the operating performance observed in July and August, the group said it expects its adjusted operating income to be positive in the third quarter.

“Current bookings indicate a sustained recovery in demand,” Lufthansa said, echoing comments this week from rival Ryanair RYA.I, which revised up its long-term traffic forecast.

The German company said it is targeting 2024 with an operating margin of at least 8% and a generation of free cash flow of about €2 billion annually in 2023 and 2024.

(Reporting by Christoph Stitz, Blandine Hinault for the French version)