The problem appeared out of the blue, when the phone came back from the airplane mode. it started with white horizontal lines on the screen and then rapidly deteriorated into more lines and app icons shadows flickering all over the screen.

I tried restart, power on/off and firmware update (I'm now on build 20161011), to no avail

Has anyone experienced anything of this sort? What are my repair options (I'm located in Germany)?

Thanks,
Pavel

update to the latest Firmware 20170708 and perform a factory reset in recovery after that.

wipe data/factory reset in recovery (this will delete your data/settings):
- Power off and then press Power and Volume-up together for around 10 Seconds
- be sure that the little arrow point on recovery (select with volume up, enter with volume down)
- Then the open android with red triangle+"no command" is shown - press Power and Volume up together again
- Select Wipe data/factory reset with volume keys, confirm with power
- After factory reset select reboot system now

If this don't help please contact your seller for a replacement.