German government’s Lufthansa bailout approved by the EU
The federal government’s bailout of Lufthansa, Germany’s flagship airline, has been approved by the European Commission. The bailout will save the airline from bankruptcy but will only be granted under certain conditions.
Lufthansa will fly again
The German government's six-billion-euro bailout of Lufthansa has been approved by the European Commission. However, the EC ruled that the airline will have to give up prized slots at airports in Munich and Frankfurt, in order to ensure fair competition.
The overall value of the bailout is nine billion euros, with Lufthansa also receiving an extra three billion in public loan guarantees, on top of the six billion euro cash injection.
Bailout to help Lufthansa survive coronavirus crisis
The bailout will save the beleaguered airline to from bankruptcy and enable it to fly another day. “This substantial amount of aid will help Lufthansa weather the current coronavirus crisis, which has hit the airline sector particularly hard,” said Margrethe Vestager, the EU’s competition commissioner.
The bailout began in earnest on Wednesday after a major shareholder changed his position and decided to back the plan. Heinz Hermann Thiele, who owns 15,5 percent of Lufthansa’s stock, had originally voiced his scepticism about the deal.
As part of the overall rescue, the government will assume a 20 percent stake in the company, though thousands of employees are likely to lose their jobs.