Lufthansa board refuses to approve bailout due to Brussels demands

Lufthansa’s supervisory board has refused to approve a E9b bailout package proposed by the German government, after the EC sought to force the airline to give up coveted slots at Frankfurt and Munich airports. Following a meeting on Wednesday, the stricken group said it would put off calling the extraordinary general meeting required to get shareholders’ approval for the deal. The EU competition authority’s demands, the supervisory board said, “would lead to a weakening of the hub function at Lufthansa’s home airports” and the resulting economic impact had to be “analysed intensively”. However, it added that it still saw the bailout from Berlin as “the only viable alternative for maintaining solvency”. The German company, which includes the Austrian, Brussels, Swiss and Eurowings airlines, has been seeking state aid in four European countries after its operations were reduced to just 1% of normal volumes in the wake of the coronavirus pandemic. After securing E1.4b from Switzerland last month, Lufthansa reached an agreement with its home government on Monday. As part of the package, Chancellor Angela Merkel’s administration will take a 20% stake in Europe’s second-largest airline, which was only privatised in 1997, and maintain the right to up that share to just over 25% to block any attempt at a hostile takeover. It will also nominate two people to sit on the company’s supervisory board. However, the EC, under pressure from Ryanair, which has threatened to challenge the bailout, wants Lufthansa to loosen its grip on its two main hubs before it waves through the deal.<br/>