Lufthansa in ‘advanced talks’ for €9 billion government support, airline confirms

Lufthansa Airbus A330-300 in temporary storage at Frankfurt Airport. Photo: © Gerrit Steiner

Deutsche Lufthansa AG (Lufthansa Group) has confirmed on Thursday that it is in ‘advanced talks’ with representatives of the German government regarding a stabilisation package worth up to €9 billion.

The financial support for the airline would include a €3 billion loan from German state-owned development bank KFW. Furthermore, the government is set to take a 20 percent stake in the European airline group through an Economic Stabilization Fund (WSF), which would provide additional capital to the company currently struggling with the effects of the Coronavirus crisis. The stake could be increased by 5 percent if necessary.

Lufthansa adds: “The WSF intends to exercise the voting rights associated with the shares as a whole only in exceptional cases such as protection against a takeover“. This comes after CEO Carsten Spohr recently stated that he does not want the government to have control over Lufthansa Group’s business decisions. Against Mr. Spohr’s initial intentions, two seats on the company’s Supervisory Board “are to be filled in agreement with the Federal Government“, according to the current plans.

It is currently unclear when an agreement between Lufthansa and the German government’s WSF can be expected. The WSF Committee, the airline’s Executive and Supervisory Board all have to vote in favor of the rescue package. Any deal reached is also subject to approval through the European Commission.

Read more: Lufthansa Group set to ramp-up flight services in June