Lufthansa is losing $1million every HOUR and is negotiating $10billion handout from the German government since coronavirus travel bans saw a 99% drop in passenger numbers
- German Lufthansa said today they are close to clinching a bailout deal today
- After grounding 700 of their planes, the group began losing $1.1million per hour
- Fleets were grounded after a 99% drop in passengers due to the outbreak
- Here’s how to help people impacted by Covid-19
Lufthansa is close to finalising talks with the German government to negotiate a $10billion bailout after coronavirus travel bans caused a 99 per cent drop in passenger numbers.
Lufthansa needs to be rescued after coronavirus travel bans forced the German group to ground 700 of its aircraft and causing the group to lose about $1.1million in liquidity reserves per hour.
Lufthansa shareholders today also agreed to not distribute $323million in retained profits as a dividend for 2019.
Some 10,000 shareholders followed the meeting online, representing 33.19 per cent of the share capital, Lufthansa said.
The carrier, which is preparing to restart passenger flights slowly from June, is currently in talks with the German, Austrian, Swiss and Belgian authorities about a roughly $10billion bailout. Chief Executive Carsten Spohr said that he expected to clinch a deal with Germany shortly.
A March 2020 file photo shows planes of German carrier Lufthansa parked on a closed runway at the airport in Frankfurt, Germany during the coronavirus spread
‘Our focus is on stabilising Lufthansa in its current form and not on acquiring other airlines. We are not planning a takeover at this time,’ he said, adding that consolidation among European airlines will slow down due to government bailouts.
Lufthansa’s rescue deal is expected to give Germany a 25.1% stake in the airline as well as supervisory board representation, people close to the matter said.
Separately, Lufthansa is expected to receive about $5.42billion in non-voting capital as well as roughly $3.25billion in state-backed loans, they added.
The exact size of the rescue deal as well as the possible contribution from Switzerland, Austria and Belgium is still unclear, the sources said.
Spohr is expected to visit Brussels this week, according to Belgian daily Echo. The airline is seeking $315million in financial aid from the Belgian state. In exchange, Belgium wants guarantees on the future of Brussels Airlines and the development of the Brussels airport.
Spohr said that despite the bailout the German government was not interested in taking an active role in the company, after he had earlier warned about possible state interference.
Pictured: Lufthansa CEO Carsten Spohr awaits the arrival of a Lufthansa Cargo aircraft from Shanghai, carrying eight million protective masks in Munich, Germany in an April photo
Klaus Schmidt, head of the council of economic advisers to the federal economy ministry, said at a ministry briefing on Tuesday, that the government should not weigh into discussions, for example, on whether Lufthansa’s Germanwings division should be shuttered.
To reduce its cash outflows, Lufthansa — which is taking a 2020 hit of about $1.08billion from crude oil hedging — said at the meeting that it had asked Airbus and Boeing to postpone aircraft deliveries.
Lufthansa is sticking to its plan to sell its catering activities, Spohr said, adding that further asset sales were not planned and a potential listing of its Lufthansa Technik business would currently only be possible at a massive discount.
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