The Lufthansa supervisory board refused to approve a €9 billion bailout proposed by the German government after intervention from the European Commission.
The board balked at requirements from Brussels that the German carrier should permanently give up take-off and landing slots at Frankfurt and Munich airports, where it has a two-thirds market share.
Lufthansa believes the German bailout “as the only viable alternative for maintaining solvency”.
The airline said the supervisory board “has taken note of the conditions currently indicated by the EU Commission”.
But the limits “would lead to a weakening of the hub function” at Lufthansa’s home airports in Frankfurt and Munich.
“The resulting economic impact on the company and on the planned repayment of the stabilisation measures, as well as possible alternative scenarios, must be analysed intensively,” the airline said.
“Against this background, the supervisory board was unable to approve the stabilisation package in connection with the EU conditions.”
The aid deal announced on Monday would see the German government take a 20% stake in Lufthansa in return for a €6 billion injection of new capital, most of it non-voting, combined with €3 billion in state-backed loans.
Germany’s economy minister Peter Altmaier said he still expected Brussels to approve the package.
“It’s not only in Germany’s interests but also in the European Union’s interests to avoid a sell-off of strategic interests in the industrial sector as a result of this pandemic,” he added.
Ryanair has vowed to challenge the bailout package, arguing that it would “massively distort competition” in the German market for the next five years.