Lufthansa accepts Commission’s requirements for rescue plan
Monday, 01 June 2020
Lufthansa’s supervisory board accepts the European Commission’s demands regarding the German government’s rescue plan, the airline announced on Monday.
“After intensive discussions, we have decided to approve the proposal submitted to us by the board of directors. We recommend that our shareholders follow the same path,” said Karl-Ludwig Kley, Chairman of the Board, in a statement. “However, it must be made clear that Lufthansa is facing great difficulties,” he added.
The plan, which envisages the state becoming the company’s largest shareholder, with 20% of the capital and two seats on the supervisory board, will still have to be approved by the shareholders, who will meet in an extraordinary general meeting on 25 June, according to the press release.
On Wednesday, Lufthansa had refused to approve the rescue plan, believing that the compensatory measures required by the European Union in terms of competition would “weaken” the company, which is already in great difficulty because of the coronavirus pandemic.
Lufthansa will have to cede up to 24 take-off and landing slots, which are highly coveted and valuable rights for airlines, representing eight parked aircraft, to competitors. The Commission had requested that Lufthansa cedes up to 20 aircraft and even more slots, according to a source close to the negotiations.
The rescue plan for Lufthansa, the parent company of Brussels Airlines, provides for Berlin to take 20% of the group for €6 billion and to guarantee a €3 billion loan.
This would be the first time that the German state would return to the company’s capital since it was fully privatised in 1997.