It was an offer they couldn’t refuse.
Financially devastated by the Covid-19 pandemic, German flag carrier Deutsche Lufthansa AG’s Supervisory Board said this week that it has voted to accept the German government’s €9 billion (US$10 billion) stabilization package, Xinhua reported.
The package of loans and various measures was offered by Germany’s Economic Stabilization Fund to help the airline weather the coronavirus crisis. Monday’s decision also means accepting the promises announced to the European Commission, according to Xinhua.
Lufthansa said it will be obliged to transfer to one competitor each at the Frankfurt and Munich airports up to 24 take-off and landing rights for the stationing of up to four aircraft.
The option is only available to new competitors for one and a half years, and will be extended to existing competitors if no new competitor makes use of it, Xinhua reported.
Karl-Ludwig Kley, chairman of the Supervisory Board of Lufthansa, said in the statement that the company has made “a very difficult decision.”
“We recommend our shareholders to follow this path, even if it demands substantial contributions to stabilize their company. But it must be said clearly that there is a very difficult path ahead of Lufthansa,” Kley said.
The package still needs the approval of the competition authorities and the shareholders after it was okayed by both the Management Board and the Supervisory Board of the company. A general meeting with shareholders to discuss the package is scheduled for June 25, Xinhua reported.
Lufthansa’s CEO Carsten Spohr said that stabilizing Lufthansa is not an end in itself, and that the company will work to defend its leading position in global air traffic together with the German government.
Lufthansa said that it is foreseeable that international air traffic will not reach the pre-crisis level in the coming years.
The company expects its fleet to be 100 aircraft smaller post-crisis, implying the loss of about 10,000 jobs, Bloomberg reported.