Lufthansa stock soars as billionaire OKs bailout

Daniel Fowler
June 26, 2020

Shareholders of German flag carrier Deutsche Lufthansa gave the green light to the federal government's nine-billion-euro (10 billion USA dollars) stabilization package, the company said on Thursday.

Germany will also have to come up with a restructuring plan for Lufthansa if it has not sold off its stake six years after granting the recapitalisation aid.

The European Commission said Lufthansa would have to make room for rivals at the Frankfurt and Munich airports to ensure fair competition.

Brussels says it will approve the deal, but wants dividends and share buybacks banned until state support is paid back. The legal fight adds to several other Ryanair legal challenges to state aid for airlines.

"Lufthansa is addicted to state aid", Ryanair Chief Executive Michael O'Leary had complained last month.

"I will vote for the agreement", Thiele told the Frankfurter Allgemeine Zeitung in an interview on the eve of an extraordinary general meeting where investors will vote on the proposal.

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She graduated from Boston University and has articles in the Wall Street Journal, Science, and The Boston Globe. Last week, in the United Kingdom a 13-day-old baby become the youngest person thought to have died from Covid.

Dozens of Lufthansa employees rallied at Frankfurt airport early on Thursday, many wearing the carrier's high-visibility yellow vests and face masks to curb the spread of the virus.

"Lift us up where we belong, vote yes!" read one sign carried by a demonstrator, while another said, "We are Lufthansa, we are family".

Billionaire Thiele had objected to the bailout terms and proposed an indirect government holding in Lufthansa via Germany's KfW development bank rather than a direct stake and board representation.

Even with the government aid, Lufthansa has warned it may have to slash thousands of jobs as travel demand is expected to stay below pre-pandemic levels for years.

Lufthansa struck a deal overnight with the UFO union representing German cabin crew that is set to reap more than 500 million euros in savings, including steps to stop pay rises, cut working hours, and a cap on pension contributions.

The group already secured CHF1.5 billion ($1.6 billion) in loans, 85 percent guaranteed by the Swiss government, for its Swiss airline subsidiaries, Swiss and Edelweiss, to help them through the liquidity crisis caused by Covid-19; and it negotiated a €450 million bailout with the Austrian government.

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