Lufthansa deal sets up UK talks with key carriers
The bailout is Germany’s biggest since the virus crisis began
Lufthansa and the German government have agreed a €9 billion (£8bn) bailout as financial deals to prop up the airline industry gather pace.
The rescue package will give the government two seats on the supervisory board and a 20% stake in the group, which owns airlines in Germany, Austria, Switzerland and Belgium.
It is the largest German corporate rescue since the coronavirus crisis struck.
Lufthansa Germany’s Federal Economic Stabilisation Fund, which is being used to assist companies hit by the coronavirus pandemic, has approved the package.
UK government ministers will be looking closely at the deal as the Treasury considers special support packages for companies in key industries such as aerospace and car manufacturing.
Irish budget airline Ryanair has been critical of bailouts which it regards as unlawful state aid.
The German government will earn an initial 4% this year. It has an option to increase its stake to 25% plus one share, enabling it to block any potential takeover.
Ministers in Berlin, who have set up a €100 billion fund to take stakes in companies struck by the coronavirus crisis, have agreed to sell the government’s shares in full by the end of 2023, subject to full repayment of the investment and the share price being above the purchase price.
The company is shutting down its discount carrier, Germanwings, and plans to shed 10,000 jobs.
French state-backed loans amounting to €7 billion given to Air France-KLM last month included commitments to cut absolute carbon emissions in half by 2024 on its domestic network, compared with 2019.
US carriers American Airlines, United Airlines and Delta Air Lines have also sought state aid.