Lufthansa is partially nationalized and receives 9 billion euros from the German state

The Lufthansa Group in the 2019 financial year

Sales and profits in € million, margin in percent

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The EU and shareholders must first agree

In addition, two seats on the supervisory board are to be filled by two experts in consultation with the federal government, one of which should also become a member of the audit committee. The conditions for state aid are the provisional waiver of dividend payments and restrictions on management remuneration. The company also undertakes to pursue sustainability goals, including renewing the fleet. The management of the WSF and Lufthansa agree on the deal, but it still requires the final approval of the management board and the supervisory board of the group. An extraordinary general meeting also has to decide on the capital increase, and the package ultimately requires the placement of the EU Commission in Brussels. There are still some concerns about the rescue package.

Confederation guarantees 85 percent of a loan

Lufthansa had a liquidity of 4.4 billion euros in April. However, 1.8 billion euros of this is said to belong to customers for tickets for canceled flights that have not yet been reimbursed. The group had drawn up existing bilateral credit lines and was able to conclude further loans at short notice. However, CEO Spohr had said weeks ago that the company would lose around 1 million euros an hour from its liquidity reserve, around 170 million euros a week and over 700 million euros a month.

The management of the Lufthansa Group has been negotiating for weeks with the governments of the group’s home countries, which also include the Swiss Swiss International Air Lines, the Austrian Austrian Airlines and the Belgian Brussels Airlines. In Switzerland, the Federal Council had already guaranteed Swiss and the other Lufthansa subsidiary Edelweiss Air a five-year loan of CHF 1.5 billion (EUR 1.42 billion) under certain conditions through a banking consortium at the end of April. The Confederation guarantees just under CHF 1.3 billion, which corresponds to 85 percent of the amount spoken. In return, it receives the entire share capital of Swiss as a guarantee if the company is unable to repay the loans. Agreement with the government representatives in Vienna and Brussels on any aid is still pending.

For airlines like Lufthansa, the coronavirus crisis is a deep cut that can even develop at a turning point. Aviation will look different for many years than before the expansion of Sars-CoV-2, because the business with holiday and holiday flights will shrink considerably. The management of the Kranich line expects the market to recover very slowly and not completely in the foreseeable future. Airport operator Fraport, which also includes Lufthansa’s home port with Frankfurt Airport, recently forecast that passenger numbers will not return to pre-crisis levels until 2024.

Flight schedule at the 1955 level

Before the spread of the virus that triggers the life-threatening lung disease Covid-19, Lufthansa was a healthy and well-run company. In 2019, with consolidated sales of EUR 36.4 billion, an operating profit of EUR 2 billion was generated. In March, however, business came to a standstill due to global travel warnings and entry bans. Over 90 percent of the aircraft remained on the ground, and Lufthansa’s flight schedule was the same as in 1955.

The Lufthansa Group then announced in mid-April that it plans to reduce the pre-crisis workforce of over 130,000 employees by 10,000 people and the fleet of a good 760 aircraft by 100 aircraft. In the meantime, the industry hopes that at least the travel season in Europe will not completely fall into the water and that business with business trips will slowly pick up, for which there are first tentative signs.

You can contact the business editor Michael Rasch Twitter, Linkedin and Xing as well as NZZ Frankfurt Facebook consequences.