Lufthansa closes in on $8.7b deal, but insists on its own terms

Lufthansa , locked in tense negotiations over terms of a multi-billion euro state bailout, is considering court protection as a last resort should the sides fail to reach an agreement. The so-called “Schutzschirm” protection would shield Europe’s biggest airline from creditors for three months while it works out a management-led restructuring plan. The specter of a court-supervised proceeding comes as talks with Germany intensify over terms of a rescue that could exceed E8b. One option being discussed could include giving the government seats on the board and the power to block strategic decisions - terms Lufthansa is loath to accept because they may dent the firm’s competitiveness. While talks are continuing and German leaders have promised not to allow Lufthansa to fail, the possibility of creditor protection harkens back to the global financial crisis a decade ago. The airline’s management team fears that the terms on offer would limit Lufthansa’s ability to compete in Europe against low-cost carriers and internationally against US and Asian carriers that won’t be as indebted in the wake of the crisis.<br/>