Wednesday, 27 May 2020

European aviation very uncertain as Lufthansa board rejects EU conditions for massive bailout.

Hundreds of thousands of aviation jobs are now at risk all over Europe after the board of The Lufthansa Group has rejected European Union's conditions attached to the massive €9 billion bailout the group needs to survive the current coronavirus COVID-19 crisis. 

According to sources at the German carrier, the board had been expected to rubber-stamp the deal and sign it off without challenge or even the murmur of disquiet. However,  they refused to go along with an EU condition that would have forced Lufthansa to permanently give up numerous take-off and landing slots at both its main hubs of Frankfurt and Munich airports.  

Of the conditions, Lufthansa said: "They would lead to a weakening of the hub function at Lufthansa's home airports in Frankfurt and Munich. The resulting economic impact on the company and on the planned repayment of the stabilization measures, as well as possible alternative scenarios, must be analyzed intensively. 

Against this background, the Supervisory Board was unable to approve the stabilization package in connection with the EU conditions."

Yet, even as the board agreed, the bailout plan was "the only viable alternative” to insolvency it couldn't go along with it.  Leading many inside the company surprised, bewildered and fearful for the future.  One source told us:  "The Supervisory Board are gambling with the jobs of nearly 140,000 people over just 72 slots at Munich and Frankfurt - it's madness," 

“It’s not only in Germany’s interests but also in the European Union’s interests to avoid a sell-off of strategic interests in the industrial sector as a result of this pandemic,” The Economy Minister Peter Altmaier said after the shock announcement from Lufthansa, saying he still thought the deal would go through.

When approached for a quote, the European Commission said it would give  “no comment on a specific case”.

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