Interesting information about the Privatair thing, have to ask my tax guy about that. As far as i know though no german airline does that at the moment. However all have a tax free part of income, but that is not for flights outside germany but for flying at night and during weekends/holidays.
How big that portion is is a thing between the company and it's relevant tax authority, if they can prove that a lot of the flying takes place during the night or weekends the tax free portion can become quite substantial. I believe AB had the highest part in the past at around 25% tax free, that has changed though with the changed route network and less charter flying. Lufthansa sits around 16% tax free as far as i know.