Lufthansa had paid back in advance 1.5 billion euros ($1.7 billion) of state aid obtained last year at the height of the COVID-19 pandemic, which decimated air travel, the German flag carrier said Monday.
The payment comes on the back of a 2.2-billion-euro capital increase as the German carrier, in which the German state has a 14% stake, banks on a revival of demand for air travel next year.
Lufthansa added it also intends to pay off an aid tranche worth one billion euros by the end of the year.
The carrier had already paid back a state loan of one billion euros in February and has bounced back following the successful 2.2-billion-euro capital increase launched last month.
In June last year, Lufthansa shareholders overwhelmingly approved a 9-billion-euro government bailout as the aviation sector found itself stalled by coronavirus headwinds that brought flying to a standstill.
"Today, we are keeping our promise and paying back a large part of the stabilization funds earlier than expected. We are increasingly confident about the future. More and more countries are opening their borders" as demand returns, said chief executive Carsten Spohr.
"We are very grateful that Deutsche Lufthansa AG was stabilized with tax money in the most challenging of times. This has made it possible to preserve more than 100,000 jobs and secure them for the future."
Berlin stepped in June last year as the pandemic looked to threaten the future of the group which includes Austrian, Swiss and Brussels Airlines.
With the loosening of travel restrictions and a gradual return in demand, Lufthansa posted a net loss of 756 million euros for the second quarter of this year – half the 1.5 billion euros for the same period in 2020 when COVID-19 brought global air traffic virtually to a halt.
The carrier nonetheless is maintaining a major job-cutting program that has seen some 30,000 positions shed since the start of the pandemic.
In all, the health crisis is set to slash the carrier's workforce by around 30% since the start of the pandemic.