Update 2 June: Lufthansa’s supervisory board has now
approved the rescue deal and is recommending shareholders also accept it at an
extraordinary general meeting to be held on 25 June. Supervisory board chairman
Karl-Ludwig Kley said the move to approve the deal was “a very difficult
decision” and that shareholders might be called upon to “make substantial contributions
to stabilising their company”.
The €9 billion financial package being offered by the German
government still needs to be approved by EU competition authorities.
Lufthansa CEO Carsten Spohr said it would be necessary to
restructure the business even with the extra liquidity provided by the deal. “The
expected slow market recovery in global air traffic makes an adjustment of our
capacities unavoidable. Among other things, we want to discuss with our
collective bargaining and social partners how the impact of this development
can be softened in the most socially acceptable way possible.”
The Lufthansa executive board has voted to accept the
conditions of a German government financial stabilisation package worth €9
billion after the European Commission reduced the number of slots it wants the
group to give up at its hub airports.
According to Lufthansa, the scope of conditions required by
the commission were reduced in comparison with “initial indications”. In
exchange for loans and state guarantees, the group will be obliged to transfer
to one competitor each at Frankfurt and Munich airports up to 24 take-off and
landing slots. That equates to three take-off and three landing slots per
aircraft per day for the stationing of up to four planes.
However, the slots will only be available to new competitors
at Frankfurt and Munich for one-and-a-half years. If no other airline makes use
of the rights in that time, it will then be extended to existing competitors.
Slots will be allocated in a bidding process and can only be taken over by
European carriers that have not received substantial state aid as a result of
the coronavirus crisis.
The revised deal will now go back to Lufthansa’s supervisory
board, which last week said it could not accept the terms as they stood and delayed
calling an extraordinary general meeting until it could examine the agreement
further. If the board approves the deal, it will then go to shareholders for
approval.