Lufthansa’s $10 billion government bailout hit an obstacle on Wednesday after the German airline’s supervisory board refused to approve the bailout package after the European Commission proposed the airline to give up valuable slots at Frankfurt and Munich airports.
The bailout plan nevertheless remains “the only viable alternative” to insolvency, negotiations will continue over EU demands that would “lead to a weakening” of its airport hubs as well as its ability to repay loans.
Reports state that the European Commission wants Lufthansa to give up 72 of its lucrative take-off and landing slots at the two airports, on a permanent basis. The airline is reportedly willing to consider it if the sell-off is a temporary measure only.
The bailout deal announced on Monday would see the German government take a 20% stake in Lufthansa in return for a 6 billion euro injection of new capital, most of it non-voting, combined with 3 billion in state-backed loans.
German Minister for Economy Peter Altmaier said that it is “not only in Germany’s interests but also in the EU’s interests to avoid a sell-off of strategic interests in the industrial sector as a result of this pandemic.”