Supervisory Board approves rescue package – despite tough EU requirements

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Well, after all: after initial opposition, the supervisory board of the severely battered Lufthansa has accepted the conditions imposed by the EU Commission for a state rescue package.

The Lufthansa Supervisory Board approved the rescue package negotiated with the federal government for the aviation group on Monday. This also accepted the announced commitments to the EU Commission, as Lufthansa announced in Frankfurt am Main.

Lufthansa must surrender take-off and landing rights in Frankfurt and Munich. Shareholders should now approve the rescue package at an extraordinary general meeting on June 25.

Big step towards rescue

CEO Carsten Spohr said that stabilizing Lufthansa was not an end in itself. “Together with the Federal Government, it must be our goal to defend our top position in global air traffic. We are grateful to all those involved in stabilization, including our customers, employees and shareholders, for this perspective,” Spohr is quoted in the message.

The group has taken a big step further. At the last supervisory board meeting last Wednesday, the supervisory board had postponed the decision to accept the government bailout package for nine billion euros. The reason given by the company in Frankfurt was the possible conditions imposed by the EU Commission, which could check the take-off and landing rights at various airports in the event of state aid.

Tough negotiations over take-off and landing rights

The next step is the approval by the Annual General Meeting on June 25 of the rescue plan including conditions. This provides for the state economic stabilization fund to subscribe to shares in the course of a capital increase in order to build up a 20 percent stake in the airline’s share capital. In addition, silent deposits totaling up to EUR 5.7 billion and a loan of up to EUR 3 billion are planned.

Shortly before Pentecost, it became known that the board wanted to accept a compromise on the conditions previously negotiated between Berlin and Brussels. This stipulates that Lufthansa must hand over 24 take-off and landing rights – so-called slots – to competitors at its most important airports in Munich and Frankfurt. But the go of the supervisory board was still pending.

Slots are a major player in the industry – so negotiations for this number were tough: initially there were 20 aircraft with up to 80 slots, then the EU went down to just under 50 slots. The company initially only offered to temporarily do without 3 take-off and landing pairs.

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