Germany, Brussels seal pact on Lufthansa rescue plan, say sources

Since the pandemic hit Europe, the Lufthansa group has been bleeding €1 million per hour, with around 90 per cent of its 760-aircraft fleet grounded. — Reuters pic
Since the pandemic hit Europe, the Lufthansa group has been bleeding €1 million per hour, with around 90 per cent of its 760-aircraft fleet grounded. — Reuters pic

FRANKFURT, May 30 ― Germany and the European Commission have reached a pact on a giant Berlin-funded rescue plan for coronavirus-hit Lufthansa, a Commission spokeswoman and a source close to the negotiations said yesterday.

Since the pandemic hit Europe, the Lufthansa group ― which also includes Brussels and Austrian Airlines and Swiss ― has been bleeding €1 million (RM4.82 million) per hour, with around 90 per cent of its 760-aircraft fleet grounded.

The deal would see the German carrier cede eight planes and their associated landing rights, the spokeswoman and the source said.

German media had previously reported the European Commission would demand the group give up valuable takeoff and landing rights at its Frankfurt and Munich hubs in exchange for Brussels' green light.

The €9 billion (RM43.4 billion) German state lifeline, would see Berlin take a 20-per cent stake in the group, with an option to claim a further five percent plus one share to block hostile takeovers.

That would make the federal government Lufthansa's biggest shareholder.

On top of a total €5.7 billion in extra capital and 300 million to buy the shares at face value, public investment bank KfW would also lend Lufthansa three billion euros.

The company would agree to pay back much of the capital plus interest, while granting the state two seats on its supervisory board.

Hammering out the details of the package took so long because Chancellor Angela Merkel's conservatives were keen to minimise state control over the company's day-to-day running. ― AFP

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