Kurz pointed out that the AUA was “naturally” close to the government’s heart, the airline was important for the Vienna location and the jobs of its employees, but the ownership structure was clear: “The group is German,” said Kurz. The government is only ready to help if there are concessions in return, a direct state participation, also in the AUA mother Lufthansa.
When asked about the rejected attitude of Lufthansa boss Carsten Spohr to a state participation, Kurz said: “I was there during the conversation, it didn’t happen that way.” The government agreed in any case that the maximum for the location Kurz wants to reach Austria. But it was only the first conversation, “negotiations are only starting”.
In short: “Want to keep people in employment”
Chancellor Sebastian Kurz talks about negotiations with Lufthansa about the AUA and measures for the economy and taxpayers.
If there was a good offer, one would find a way for a cooperation, the chancellor continued. The government is also preparing for the case that there is no good offer, but it is clear that there is tax money “only for added value”. The AUA had applied for EUR 767 million in state aid from the Coronavirus Aid Fund in Austria the previous evening.
Spohr came to Vienna especially
Lufthansa CEO Spohr had traveled to Vienna specifically for the meeting, the interview took place with Kurz, Vice Chancellor Werner Kogler (Greens), Finance Minister Gernot Blümel (ÖVP) and State Secretary Magnus Brunner (ÖVP). Details of the AUA rescue were not disclosed after the appointment.
In a written statement, Blümel subsequently gave concessions for government aid such as the expansion of the hub, the strengthening of the location and added value for Austria and the future of jobs as “indispensable” for the further course of the talks. Lufthansa also had to “outline the future prospects and the future role of the Austrian subsidiary”. At the technical level, talks between the banks and the Covid 19 financing agency (COFAG) are now being continued.
Direct investment in Lufthansa?
A participation of the Republic in the AUA mother Lufthansa could give AUA fresh equity. In an unconfirmed report by the “press” (online edition), there was talk of EUR 267 million on Wednesday. According to the current market value, these would correspond to a stake of almost seven percent in the German aviation group. “The rest of the state aid would be divided into credit guarantees (410 million euros) and a non-repayable subsidy for fixed costs for closed companies (capped at 90 million euros),” the “press” without citing the source.
COFAG told APA that the application for state aid could not yet be approved. You need a ready-made loan agreement, currently only a “term sheet” is available. In addition, the conditions would not comply with the COFAG guidelines.
Debate also in Germany
There are also talks in Germany about participating in return for state funds. However, Lufthansa is also defending itself against too much state influence there and is therefore rolling not only for the AUA, but also for itself insolvency scenarios. “If the Federal Republic wanted to exert too much influence on operational business tasks, the Austrian government might demand this as well, possibly also Switzerland, Belgium, Bavaria or Hesse,” said Spohr of the “Zeit”.
A decision in Germany could take some time, it said on Wednesday. The responsible ministries had given the ailing group several options for state aid this week, according to negotiators. The details would now have to be negotiated and coordinated with the EU Commission, which has yet to give the green light. It is not yet clear how much money Lufthansa needs. According to government and industry circles, it should be around nine billion euros.