Flag carrier Lufthansa is set to run out of cash unless it is successful in its negotiations with the German government over an a €10 billion aid package.
The firm made its statement as it reported a €1.4 billion loss for the first quarter of the 2020 as its revenues have been smashed by the impact of COVID 19 and the resulting travel restrictions.
Lufthansa’s group revenues fell by 18 percent to 6.4 billion euros in the first quarter. In March alone, revenues declined by almost 1.4 billion euros or 47 percent.
While the firm has embarked on an aggressive cost-cutting programme, including closing down German Wings, this fell far short of the fall in revenues and Lufthansa said it expected to continue to lose money on its fuel hedging programme into the second quarter.
However, given the current business outlook, refunds of cancelled tickets as well as upcoming repayments of financial liabilities, Lufthansa expects a significant decline in liquidity in the coming weeks.
“The Group does not expect to be able to cover the resulting capital requirements with further borrowings on the market. The Group is therefore in intensive negotiations with the governments of its home countries regarding various financing instruments to sustainably secure the Group’s solvency in the near future. The Management Board is confident that the talks will lead to a successful conclusion,” Lufthansa said in a statement accoupling the results.