Lufthansa to Receive $10 Billion from German Government
Lufthansa has been struggling like most airlines during the coronavirus pandemic. Now the German government is ready to step in and lend a hand. The company that was privatized two decades ago, will receive a 9 billion-euro ($9.8 billion) bailout. That financial help also comes with a catch. The government would take an initial 20% stake that could rise to 25% plus one share in the event of a takeover, Bloomberg reports. That would enable the government to block such attempts.
The plan is not a done deal yet. It requires European Union approval. Additionally its European rivals will also oppose it. Ryanair has already said it will contest the German aid package for Lufthansa, per the budget airline’s Chief Executive Michael O’Leary. “Ryanair will appeal against this latest example of illegal state aid to Lufthansa, which will massively distort competition,” he added in the statement, Reuters reports.
Lufthansa was trying to avoid any government influence, but it was in dire need of cash after the coronavirus pandemic grounded most of its fleet.
The package is the biggest corporate rescue in Germany during the current pandemic. The German government has set up the 100 billion-euro fund