Lufthansa's debt priorities mean taking fewer Airbus planes

Lufthansa is unlikely to take delivery of all 80 of the jets it's allowed to accept through 2023 under terms of a E9b government bailout, according to a person familiar with the matter. The German airline will instead prioritize quick repayment of the aid, said the person, who asked not to be identified discussing confidential matters. While the plans are in flux and depend on the pace of a travel recovery, any shortfall would be a setback for Airbus SE. The European planemaker, also partly owned by Germany, is Lufthansa's most important supplier and lobbied for stronger assurances that the airline would keep up plane deliveries, people familiar with the matter said. The tension over orders shines a light onto the inner workings of one of Europe's biggest airline bailouts, and the pressures that shaped decisionmaking on a drawn-out, white-knuckle process. Lufthansa had 198 aircraft on order at year-end, of which 156 were for Airbus jets. During discussions on the airline's rescue financing, the planemaker's CEO, Guillaume Faury, pressed his Lufthansa counterpart Carsten Spohr to take all Airbus aircraft on order through 2023, the people said. The German government acted as mediator, they said, resulting in a compromise memorialized in the aid package: Lufthansa would not cancel any aircraft orders, while it would accept a maximum of 80 aircraft during the period. "Airbus certainly would have liked to use the bailout package for Lufthansa to ensure delivery of most the aircraft," said Daniel Roeska, an analyst with Sanford C. Bernstein. "But that would have put management in a tight corner and may even have raised concerns with the European Commission," which monitors competition.<br/>