The Lufthansa Group is in negotiations with the German government for a €9 billion stabilization 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 percent equity stake in the company and for the WSF to 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 totaling 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 totaling 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,