Lufthansa is reported to be considering bankruptcy protection as it seeks at least €9 billion in state aid.
The use of a court filing known as Schutzschirm would protect the German carrier from creditors for three months as it restructures its finances.
However, bankruptcy protection was being considered as a last resort as Lufthansa’s talks with German politicians drag on, sources told Bloomberg.
One stumbling block was the prospect of the German government taking seats on the board – a prospect the airline wants to avoid.
Chief executive Carsten Spohr fears that by allowing German officials to influence decision making, other governments will also demand board representation in return for state aid. The Lufthansa group also includes flag carriers Austrian Airlines and Swiss.
Spohr ruled out selling Brussels Airlines despite tapping Belgian taxpayers for a €290 million loan, in a letter to the government, according to local broadcaster VRT.
Austrian Airlines has applied for a government rescue package of €767 million in loans and grants.
Lufthansa, which like all international carriers has been forced to ground nearly all its flights due to coronavirus, declined to comment.
But the airline warned last week that it faces a cash crunch within weeks after suffering a first quarter loss of €1.2 billion.
The airline group said it was in “intensive negotiations with the governments of its home countries regarding various financing instruments to sustainably secure the group’s solvency in the near future”.