The stage is set for a clash between the German and EU government with Lufthansa’s board rejecting the $9billion bailout agreed with its domestic government after the European Commission proposed the airline to give up valuable slots at Frankfurt and Munich airports.
“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,” said the German finance minister Peter Altmaier.
Reports state that the EC wants Lufthansa to give up 72 of its lucrative take-off and landing slots at Frankfurt and Munich on a permanent basis, while the carrier 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.
Meanwhile Ryanair chief executive Michael O’Leary renewed his attacks on the bailout by calling on the German Chancellor Angela Merkel to abandon plans to give €9bn of “illegal State Aid to the ungrateful Lufthansa”.
The chief executive referenced Lufthansa refusal to hand over slots in Frankfurt and Munich, “which would promote competition and choice” to the Lufthansa monopoly in Germany.
“If Lufthansa do not want to hand over slots, or give the German government the effective Board representation they are entitled to in return for a State subsidy of €9bn, then Mrs Merkel should say “buzz off” Lufthansa, and instead reduce air travel taxes for all airlines operating in Germany. Lufthansa would be the major beneficiary of any such tax reductions, but it would also encourage other airlines, including Ryanair, Laudamotion and EasyJet, to return to flying and pass on lower fares to consumers,” said O’Leary.