The Lufthansa Group is in negotiations with the German
government for a €9 billion stabilisation package after warning it could run
out of liquidity in the coming weeks.
Lufthansa has been discussing financing packages with the
Federal Economic Stabilization Fund (WSF), but a sticking point appears to be
the German government’s condition that it take a 25 per cent equity stake in
the company and for the WSF gain representation on the group’s board. CEO
Carsten Spohr earlier said he would not accept such a stipulation.
There was media speculation following his statement that the
group would instead seek bankruptcy protection, but Lufthansa’s latest
announcement on Thursday appears to show the company may be willing to concede
for the sake of ensuring its future.
The negotiations include a “silent participation” and a
secured loan totalling a combined €9 billion. Other conditions of the deal so
far include the waiver of future dividend payments.
The group said: “The executive board of Deutsche Lufthansa
AG is continuing negotiations with the aim of ensuring the future viability of
the company for the benefit of its customers and employees.”
The group’s Swiss and Edelweiss airlines recently agreed a
rescue deal with the Swiss Federal Council for loans totalling about €1.4
billion. Spohr is also in negotiations with the governments of Austria and
Belgium for separate packages.
Meanwhile, Lufthansa, Eurowings and Swiss have announced
they will begin restarting some services in June as Germany continues easing
its lockdown measures and hotels across Europe begin reopening. The airlines
will reactivate 80 aircraft to operate a total of 106 destinations, mostly to
popular holiday spots such as Mallorca, Sylt, Rostock and Crete. Passengers are
being asked to consider individual countries’ entry and quarantine regulations
when planning their trips and will be required to wear a mask or face covering throughout
their entire journey, as previously announced.