EU denies creating ‘extra hurdles’ for Lufthansa bailout

Margrethe Vestager, the EU competition chief, has rejected accusations that Brussels is creating “extra hurdles” for the E9b bailout of Lufthansa, after the German group’s supervisory board balked at requests to relinquish lucrative slots at its hub airports in Frankfurt and Munich. Speaking Friday, Vestager said rescue packages in which states injected large amounts of capital would be seen by investors as “a strengthening of the company”, and thus make it easier for saved businesses to raise money. “There is a high risk that if you hold market power, that you are a big impressive company and you get a lot of aid, that competition will be disturbed,” she added. On Monday, Germany agreed to support its national carrier with a capital injection of E5.7b, as well as E3b in government-backed loans, and E300m-worth of new Lufthansa shares, which would give Berlin a 20% stake in the airline. In the case of a hostile takeover attempt, Angela Merkel’s administration retains the right to increase its position to 25% plus one share, which is a blocking minority in German law. However, despite Lufthansa being weeks away from running out of cash, the company’s supervisory board refused to approve the bailout package on Wednesday, delaying the extraordinary general meeting needed to ratify the deal. The board of Europe’s second-largest airline said it needed time to assess the impact of demands from the EC that it give up some slots in Munich and Frankfurt, where it holds two-thirds of the available capacity. Vestager said slots would be at the “centre of the debate” as they are a “limited” and “valuable” resource.<br/>