The Lufthansa Supervisory Board has rejected Germany’s bailout package over new EU-imposed slot restrictions.
On Monday, Germany and Lufthansa agreed in principle on a €9 billion aid package. This was not a free gift, but a 4% loan with many strings attached. It also gave Germany a 20% stake and two seats at the table.
The agreement was subject to European Union regulatory approval and Lufthansa Board approval. Well, European regulators said that Lufthansa would need to hand over 20 slots in order to gain approval for the rescue deal. That was too much for Lufthansa.
Lufthansa’s Supervisor Board rejected the current bailout offer, issuing the following statement:
“At its meeting today, the Supervisory Board of Deutsche Lufthansa AG discussed the acceptance of the stabilization package offered by the Economic Stabilization Fund (WSF) of the Federal Republic of Germany, including the necessary convocation of a General Meeting.
“The Supervisory Board has taken note of the conditions currently indicated by the EU Commission. They would lead to a weakening of the hub function at Lufthansa’s home airports in Frankfurt and Munich. The resulting economic impact on the company and on the planned repayment of the stabilization measures, as well as possible alternative scenarios, must be analyzed intensively.
“Against this background, the Supervisory Board was unable to approve the stabilization package in connection with the EU conditions. However, the Supervisory Board continues to regard WSF stabilization measures as the only viable alternative for maintaining solvency.
“Deutsche Lufthansa AG will not convene an Extraordinary General Meeting for the implementation of the stabilization measures for the time being.”
Lufthansa will continue to work with German and EU authorities and an aid package, which it still sees as vital to its survival.
Just hours ago I wrote about Ryanair’s fierce opposition to the Lufthansa bailout package from Germany. Ryanair condemned the package as far too generous while Lufthansa now deems the package not generous enough…