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Lufthansa shareholders approved a potential capital raise of E5.5b, a move management said is needed to repair the stricken carrier’s balance sheet. At the German airline’s annual meeting on Tuesday, a majority of investors gave permission for the issuance of 2.15b new shares at a time of the carrier’s choosing. The nominal price of the stock would be E2.56 each, about one-fourth Lufthansa’s current share price, though the airline is likely to issue them at a higher amount. The company said last week it wouldn’t use the full amount available, and instead aim for the “smallest possible” raise. “The resolution is intended to enable us to increase our capital flexibly so that we can strengthen our balance sheet ratios again and return to our former financial stability,” CEO Carsten Spohr said in a speech to shareholders, urging them to back the proposal. The move would give Europe’s largest airline enough cash to replace Germany’s so-called silent participation, a major part of Lufthansa’s E9b government bailout. The interest rates on the instrument -- a debt-equity hybrid that doesn’t dilute shareholder voting rights -- are set to rise over coming years. A simple majority was required for the motion to pass. The airline said it hasn’t decided when to undertake the capital raise, but could do so this year if market conditions allow. Last week, Lufthansa became the latest carrier to lower its expectations for summer travel, saying a significant market recovery won’t come until the second half as inoculation programs progress. It estimates full-year capacity at around 40% of pre-crisis levels.<br/>

Lufthansa is “optimistic” about the return of corporate travel, betting that executives from the country’s small-and-medium sized companies will take to the skies again in an effort win business overseas. “Many of our corporate customers are not just the global, blue-chip companies . . . but SMEs which are the backbone of the German economy,” said Carsten Spohr, the carrier’s CE. Spohr’s confidence, which relied on data gathered by Lufthansa’s sales team, was supported by representatives of Mittelstand companies. In a survey conducted in February by the VCI — which represents 1,700 German chemical and pharmaceutical companies — nearly 60% said limits on travel were the biggest challenge facing their businesses. The study, which polled more than 120 small or medium-sized enterprises, found that the inability to take business trips was preventing companies from acquiring new customers and hindering development projects. “They don’t have a global infrastructure to live without corporate travel,” Spohr said of such businesses. “They don’t even sometimes have people on the ground in markets in Asia or the US, so people need to go there themselves.” The question of whether business travel will ever return to its pre-pandemic levels is one that has hung over the airline industry. Lufthansa, which includes Austrian, Swiss, Brussels and Eurowings airlines, has long been heavily reliant on revenues from business customers. Prior to the pandemic, corporate bookings accounted for 45% of the group’s revenue.<br/>

Turkish Airlines became one of the first major carriers to post a profit this year after a boost in freight revenues helped it ride out a continuing passenger slump triggered by the coronavirus crisis. The Istanbul-based company said it posted Q1 net income of $61m, or 438m liras, even as sales declined, reversing a year-earlier loss and beating analyst estimates. The carrier tapped into demand for cargo space that has been in short supply during the pandemic with fewer flights offering capacity in the holds of passenger aircraft. Foreign-exchange and tax gains also buoyed earnings, while operating expenses for everything from pilot wages to fuel were reduced. “The increased focus on cargo operations during the pandemic paid off,” said Burak Isyar, head of research at ICBC Turkey Securities. While airlines are beset by uncertainty as governments work toward resuming travel with the virus still raging, carriers with strong freight businesses have fared best. FedEx Corp., the biggest cargo airline, jumped the most in six months on March 19 as higher prices and online shopping lifted profit, while Qatar Airways, the No. 2, has resisted slashing capacity to target freight flows. Turkish Airlines, which has one of the industry’s biggest global networks, reported a year-earlier loss of $327m in what’s always a low-season for airlines. Analysts surveyed by Bloomberg had predicted a loss of $6.4m.<br/>