Lufthansa clinches $10 billion bailout from German government

A big white Lufthansa plane takes off

"Before the coronavirus pandemic, the company was operatively healthy and profitable and had good prospects for the future", the economy ministry said in a statement on Monday that announced the mixture of state investments and loans.

The rescue package will give the government a 20% stake in the group, which owns airlines in Germany, Austria, Switzerland and Belgium, and two seats on its supervisory board.

In addition, the government will acquire a 20% stake in Lufthansa for €2.56 per share ($2.79), or about €300 million ($327 million).

Berlin, which has set up a €100bn fund to take stakes in companies struck by the coronavirus crisis, said it planned to sell the Lufthansa stake by the end of 2023. He said the government wasn't planning to interfere in the business of running the airline and meant to sell the stake eventually. The package conditions would also let the government block the possibility of an unwanted takeover. One of those seats would be on the audit committee.

This aid through the Economic Stabilization Fund (WSF) of the Federal Republic of Germany will see the country invest €5.7 billion into the airline and receive assets in return. Altmaier said he did not want to comment on media reports.

Mr Altmaier said would help to save thousands of jobs but did not include any extra environmental conditions.

The company's trading statement said that the deal has not been approved by the European Commission, which could set conditions meant to preserve fair competition. However, the agreement is still pending formal approval through the company's Executive and Supervisory Boards, as well as the European Commission and other regulative authorities.

"They were all approved at the end, so this gives me hope that we'll also find a solution in this case".

"Scrutiny is extremely thorough as it is the first large equity-based bailout in the pandemic", the source said.

According to the Handelsblatt business newspaper, Chancellor Angela Merkel said on Monday that the German government would not allow the European Commission to deprive Lufthansa of valuable take-off and landing slots at Frankfurt and Munich airports.



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