Lufthansa’s future is in the hands of shareholders, who vote Thursday on an E9b state bailout. If they reject the lifeline, the cash-strapped carrier could tip into insolvency. The outcome was thrown into doubt by Heinz Hermann Thiele, one of Germany’s richest men. The 79-year-old built a stake of more than 15% in the carrier, becoming the largest investor, and has said he’s unhappy with the deal. Thiele’s holding gives him the power to scupper the rescue should he choose to do so, after just 38% of investors registered to vote. The measure needs two-thirds support of those in attendance. The billionaire didn’t disclose his intentions during talks with Lufthansa and government officials on Monday, according to people familiar with discussions. Lufthansa agreed with the German government in May on a bailout made up of loans and an equity investment. The accord would hand the state a 20% stake at a steep discount, diluting stockholders like Thiele. With the airline burning through 1 million euros an hour, time is running out. Story has potential scenarios that could play out in coming days between Lufthansa, Thiele and the government.<br/>
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Lufthansa missed its deadline to secure union backing for lowering labor costs, underscoring the challenge the German carrier faces to rebound from the coronavirus. Having set a June 22 target date, two weeks of intensive talks failed to produce an agreement, the carrier said Tuesday. Talks are ongoing, it added. While Europe’s biggest airline has said it might need to shed 22,000 of its around 140,000 staff as it downsizes flying operations, the deal under discussion with unions centers around a smaller, temporary cost-cutting package to help bolster liquidity. Lufthansa’s Vereinigung Cockpit pilots union has said it’s offered E350m in savings until 2023. Verdi, the union representing ground staff, has postponed its talks with the airline until after a shareholder vote on a bailout deal Thursday. Missing the deadline could dent Lufthansa’s bid to show investors it’s making progress on restructuring plans ahead of the crunch vote on the E9b German bailout package. The airline has said it could be forced to enter insolvency proceedings if the deal isn’t approved.<br/>
The South African government said Tuesday it had received unsolicited proposals from private sector funders, private equity investors and potential partners for a new national airline based on struggling South African Airways. State-owned SAA has been under a form of bankruptcy protection since December, and its administrators last week proposed a restructuring plan for which the government had to find at least 10b rand ($580m) of new funds. Creditors are due to vote on the restructuring plan on Thursday, but one of SAA’s creditors - private airline Airlink - has launched an urgent court application to try to prevent the vote from happening. The Department of Public Enterprises, which is responsible for SAA, said: “Government is intent on pursuing credible proposals for investment and strategic partnerships with the private sector, as well as equity participation for employees”. It did not name any of the funders, investors or partners who had expressed an interest in the new airline to emerge from the wreckage of SAA. <br/>
Portugal’s flag carrier TAP is confident the EC will approve a restructuring plan that would allow the airline to avoid repaying a government-backed loan, its chief executive said on Tuesday. In April, TAP asked for help as the company, which usually operates around 2,500 flights per week, was forced to suspend almost all of them as demand for travel collapsed in the coronavirus pandemic. Earlier this month, the EC approved Portugal’s plan for a E1.2b rescue loan for TAP. Rescue aid can be granted for a maximum of six months and authorities have committed that TAP will reimburse the loan or submit a restructuring plan in that time. “We believe it is possible to send a restructuring plan to the European Commission that is accepted because we believe TAP has a viable business model,” CEO Antonoaldo Neves told a parliamentary committee. “TAP has new planes, it has an extraordinary team,” Neves added. “Now it will be a long and hard recovery.”<br/>