Lufthansa accepts German govt’s rescue package

Berlin, May 30 (IANS) German flag carrier Lufthansa on Saturday said it had accepted a rescue plan offered by the country’s government and negotiated by the European Commission.

The package will see the German government pour 9 billion euros ($9.8bn) into the company, which has suffered economically due to restrictions imposed to contain the COVID-19 pandemic, reports Efe newws.

The government will take a 20 percent stake in Lufthansa.

The European Commission accepted the deal but said Lufthansa must in exchange offer 24 of its take off and landing slots at Frankfurt and Munich airports to other companies.

“The scope of the conditions required in the EU Commission’s view has been reduced in comparison with initial indications,” Lufthansa said in a statement.

“Lufthansa will therefore be obliged to transfer to one competitor each at the Frankfurt and Munich airports up to 24 take-off and landing rights (slots), i.e. three take-off and three landing rights per aircraft and day, for the stationing of up to four aircraft.

“For one and a half years, this option is only available to new competitors at the Frankfurt and Munich airports. If no new competitor makes use of this option, it will be extended to existing competitors at the respective airports,” it added.

The rescue plan agreed between Lufthansa and the German government following a tough negotiation on Tuesday had been left pending the green light from Brussels.

Subsidiaries of Germany’s largest airline include Austrian Airlines, Swiss International Air Lines and Eurowings.

The German state will become the leading stakeholder in Lufthansa, which as of March reported an operating loss of 1.2 billion euros due to coronavirus travel restrictions.

The government will also have the option to boost its stake by 5 per cent through debt purchases.

Lufthansa said: “The Supervisory Board must approve the stabilization package negotiated with the Economic Stabilization Fund (of the Federal Republic of Germany), including the commitments to the EU Commission.

“Subsequent to the Supervisory Board’s decision, the company intends to convene an Extraordinary General Meeting in the near future to obtain shareholder approval for the WSF stabilization measures.”

–IANS

ksk/