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Lufthansa Shareholders Approve €9bn Bailout

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Lufthansa Shareholders Approve €9bn Bailout

Lufthansa Shareholders Approve €9bn Bailout
June 25
13:07 2020

LONDON – Lufthansa (LH) shareholders have voted to accept a €9bn bailout package from the German government.

In exchange for the bailout, LH will lose slots at hub airports and must offer a silent participatory stake to the German Government.

“Lufthansa will re-appear from the crisis more agile and efficient,” announced CEO Carsten Spohr following the landslide 98% vote in favor of the measure.

Photo: Clement Alloing

Struggle to make ends meet


Like many other airlines, the German carrier grounded a majority of its fleet and implemented numerous cost-cutting initiatives. However, even with these measures, the airline was losing €1m per hour.

“We have no more money,” the airline warned in the days prior to the vote. Insolvency proceedings were expected to start in just a few days if the deal was not secured.

Concern over the deal


Though the unprecedented bailout package was offered weeks prior, LH’s managers were worried it would not pass. Nevertheless, LH’s CEO maintained a clear policy of building support for the measures.

Mr. Spohr at the time stated, “Legal insolvency is looming if we do not agree to this stabilization package.”

On June 24, 2020, the largest shareholder in the airline, Heinz Hermann Thiele, withdrew his opposition to the bailout. Simultaneously, LH management secured key agreements and concessions with the flight attendant union.

Just hours before the vote, the European Union approved the deal, paving the way for the final vote.

Rival airline Ryanair (FR), which previously launched a media campaign against the bailout, is expected to challenge the move in German courts.

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About Author

Jeremy Chesney

Jeremy Chesney

Jeremy is a corporate travel consultant and aviation content creator. He reflects on his 100,000+ flown miles per year through the "Travel Tales from the #nerdbirds" podcast and guest posts for a variety of aviation websites.

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