A €9 billion state bailout has been agreed with the German government to save Lufthansa from collapse.
The state is to take a 20% stake in the carrier which it intends to sell by the end of 2023.
The “stabilisation package” agreed after weeks of negotiation needs approval from shareholders and the European Commission.
The bailout will help save up to 10,000 jobs in the face of a collapse in demand due to coronavirus travel restrictions.
German finance minister Olaf Scholz said: “The support that we’re preparing here is for a limited period.
“When the company is fit again, the state will sell its stake and hopefully … with a small profit that puts us into a position to finance the many, many requirements which we have to meet now, not only at this company.”
The Lufthansa agreement will see the German Economic Stabilisation Fund (WSF) inject €5.7 billion in non-voting capital in a scheme known as “silent participation”.
Part of these funds can be converted into an additional 5% equity stake, which would enable the government to veto any potential hostile takeover bids.
Rival Air France-KLM agreed €7 billion in aid from the French government earlier in May and is poised to confirm a further €4 billion from the Dutch state. The airline holds its annual shareholders’ meeting later on Tuesday in Paris via a webcast.
Ryanair has warned that its return to scheduled flying will be “significantly more difficult” due to more than €30 billion in bailouts for European carriers including Lufthansa, Air France-KLM, Alitalia, SAS, Finnair and Tui Group.
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