Billion-dollar aid as a “wild nationalization fantasy”? : These days the fate of the Lufthansa economy is decided

Michael O’Leary is already positioning himself. The CEO of the low-cost airline Ryanair, known for his free-spinning mouth, has been shooting at the for days Lufthansa. Both companies have been fighting for supremacy in Europe for years. The fact that Germany wants to save its national airline in the corona crisis with state aid makes the manager crank up.

As a “crack cocaine junkie” who couldn’t get enough, O’Leary berated Lufthansa on British television. He believes the up to ten billion euros in loans and other aid for the Kranich Group that is speculated about is too high. After the crisis, the Germans would “run around and buy everyone else” stronger, ”he said.

In fact, the first thing is that the more than 700 parked Lufthansa aircraft can take off again and that the traditional company survives the Corona standstill in air traffic. The group currently burns one million euros per hour, according to its own information. Without income, CEO Carsten Spohr runs the money through his fingers at a record pace, which is why there is a safe end without state aid.

A sound “picture“And other media scheduled for this week” top talk “with Chancellor Angela Merkel (CDU), Finance Minister Olaf Scholz (SPD), Minister of Economics Peter Altmaier (CDU) and Minister of Transport Andreas Scheuer (CSU) is not planned according to Tagesspiegel information from government circles. But behind the scenes, the final phase of the negotiations actually begins, in which Merkel now intervenes.

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Basic discussion about state participation

“Airports, aircraft manufacturers, airlines – we have to support and protect Germany,” said Scheuer at the weekend of “world“Without informing about the status of the negotiations. Lufthansa is also silent on details.

“We are in intensive and constructive talks with the governments of our home countries Germany, Switzerland, Austria and Belgium about financing instruments in order to achieve sustainable solvency in the short term,” said a Lufthansa spokeswoman for the Tagesspiegel on Sunday. The airlines Swiss, Austrian and Brussels Airlines also belong to the Kranich Group.

In addition to loan packages worth billions from the four countries, there is also a silent or less silent participation by the state in the airline. This is openly discussed in Austria to protect the hub in Vienna, but also in Germany, by far the largest donor.

This already arouses political desires and causes controversy in the coalition and a fundamental discussion about the role of the state in the economy in the corona crisis.

“If companies like Lufthansa receive billions of dollars in tax aid, the federal government must also have a say”, SPD parliamentary group leader Rolf Mützenich said in the “picture“. “This is essential because of responsibility for the employees.” He therefore refuses to participate silently, which counteracts the Union.

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“The state is not the better entrepreneur. An intervention in corporate management would therefore be wrong, ”said CSU economic expert Hans Michelbach of the Reuters news agency on Sunday. “I believe that silent participation in a multi-billion dollar aid package is the better solution.”

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Bad example of Commerzbank

A later exit would only be made unnecessarily difficult “by participating in the company management”. Michelbach also referred to the experience with Commerzbank, where the state actually wanted to withdraw completely a long time ago, but this had not happened even a decade after the financial crisis. The deputy CDU / CSU parliamentary group leader Carsten Linnemann also rejected the SPD proposal.

“If politicians influence corporate decisions, then this has to be justified very well. I have never heard of such a reason, “said Linnemann the”Handelsblatt“. “Even with a silent participation, Lufthansa must adhere to the rules of the Economic Stabilization Fund (WSF), for example when paying dividends,” said Linnemann. “The state does not need a seat on the supervisory board to prohibit this.”

While the FDP parliamentary group leader Christian Dürr accused the SPD of “wild nationalization fantasies”, which “the Chancellor had to put a stop to”, the Social Democrats received support from the Left Party. A silent participation would mean “the state is pushing the coal over but has nothing to say,” said left-wing faction vice Fabio De Masi. After the corona pandemic, an “entrepreneurial state” is needed “that intervenes and protects the interests of employees and the general public”.

10,000 fewer jobs at Lufthansa

The Greens also speak out against the government’s “passive spectator role”. “If the federal government helps Lufthansa, it needs an active say and has to influence the future orientation, in particular the strategy for climate neutrality and the social orientation”, explained the economic expert Katharina Dröge and the budget expert Sven-Christian Kindler.

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While politics is already pulling at Lufthansa from all sides, CEO Spohr has prepared the 135,000 employees for difficult years in the past few days. After the corona shutdown, the crane will stand there with trimmed wings, the message says. The fleet will have to shrink by 100 aircraft, which also means 10,000 fewer jobs.

The then high debt burden will burden the company. It would cost one billion euros a year to repay the loans. That corresponds to around half of the Ebit profit from the previous year. The airlines were the first to be hit by the corona crisis and would be the last to be left behind, Spohr believes. The rebuilding of the business will take at least until 2023.

Lufthansa shares fate with most airlines. Whether its European neighbor Air France-KLM, the US rivals American Airlines and Delta or actually generously subsidized state airlines such as Emirates – only a few airlines survive the grounding without help. Where it is denied to them, there is often only bankruptcy. South African Airways, for example, is now history after 86 years.

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