Money State aid: The state joins Lufthansa

18:33  21 may  2020
18:33  21 may  2020 Source:   sueddeutsche.de

report: Federal government and EU Commission agree on Lufthansa bailout

 report: Federal government and EU Commission agree on Lufthansa bailout © Christof STACHE According to a media report, the Federal Government and the EU Commission have agreed in the negotiations on the multi-billion state rescue package for Lufthansa. According to a media report, the Federal Government and the EU Commission have reached an agreement in the negotiations for the multi-billion state rescue package for Lufthansa.

Der Staat steigt als voraussichtlich als größter Einzelaktionär bei der Lufthansa ein. © David Ramos / Getty Images The state is expected to join Lufthansa as the largest single shareholder.

The federal government saves the airline with a billion dollar package. The talks are nearing completion - and the EU wants to make flying possible again.

The state joins Lufthansa

The state is expected to return more than 20 years after the complete privatization of Lufthansa as the largest single shareholder in the financially stricken airline. The Federal Government will take over 20 percent of the shares as part of a capital increase through the Economic Stabilization Fund (WSF) and appoint two members to the Group's Supervisory Board. The rescue package, which contains other components, has a volume of around nine billion euros. Detailed questions still have to be negotiated. WSF, the airline's board of directors and supervisory board, an extraordinary general meeting and the European Commission have yet to approve.

Lufthansa subsidiary AUA approves austerity package - short-time work and cut wages

 Lufthansa subsidiary AUA approves austerity package - short-time work and cut wages Vienna, May 20 (Reuters) - The Lufthansa subsidiary Austrian Airlines (AUA), which is struggling for state aid, wants to cut costs by a fifth and has decided to cut costs for its employees. In order to ensure the economic survival of the airline, which was badly shaken by the corona pandemic, the short-time work for the workforce is to be extended until 2022, AUA said on Wednesday after a meeting of the supervisory board.

The decision, which is now almost certain, paves the way for the survival of Lufthansa, which has suffered dramatic financial difficulties due to the corona crisis. In the event that the negotiations failed, Lufthansa had prepared a so-called protective shield procedure, a relatively new variant of German insolvency law. Lufthansa still had a good four billion cash and cash equivalents at the end of April, which, however, melt by around 800 million euros per month. It also faces around 1.8 billion claims from customers whose flights have been canceled and tickets have not yet been refunded.

Almost at the same time as the WSF agreement, the European Aviation Safety Agency (EASA) and the European Center for Disease Prevention and Control (ECDC) presented hygiene guidelines that should enable European airlines to resume air traffic across the board - including recommending it the authorities tell the EU member states to impose a mask requirement. However, the airlines are allowed to fill all the seats on board, a quarantine is not intended for crew or passengers. Lufthansa plans to offer a significantly larger number of flights again in mid-June, namely around 14 percent of the original flight schedule. The guidelines are a basic requirement for this.

Flightright is suing Lufthansa and Ryanair because the airlines are not reimbursing their money

 Flightright is suing Lufthansa and Ryanair because the airlines are not reimbursing their money © Provided by Business Insider Germany Numerous holidaymakers worldwide have to give up their spring or summer vacation this year due to the corona pandemic. travelers are now trying to get their money back for canceled vacations, but this is not so easy. Mediation portals, travel providers and airlines are overwhelmed with the overwhelming number of inquiries and cancellations and can hardly keep up.

In addition to the capital increase, the federal government's rescue package also includes a KfW loan of three billion euros and a silent participation of five billion euros. With the participation of 20 percent, which it acquires at a nominal value of EUR 2.56 per share, the state initially remains under the so-called blocking minority, for which it would have to own more than 25 percent of the shares. However, he also signs a convertible bond worth five percent plus one share. The WSF would exchange these for shares if an investor made a public takeover offer for Lufthansa. This is to prevent hedge funds, for example, from starting cheaply and gaining access to aid worth billions.

Two seats on the Supervisory Board

The way in which the state should help Lufthansa was controversial in the federal government. While the SPD demanded extensive say, the CSU urged that the company be given as much freedom as possible. The result is a compromise with which all sides can obviously live well. With a stake of initially only 20 percent, the state initially remains below the originally considered stake of more than 25 percent. According to the mandatory notification to the stock exchange, the WSF also intends "to exercise the voting rights associated with the shares only in exceptional cases such as protection against a takeover". CSU regional group leader Alexander Dobrindt emphasized that the aim is "that the federal government can withdraw from the company as quickly as possible once the crisis has been overcome." This is "an important signal to the aviation industry and the entire economy." Two seats on the supervisory board are to be filled "in coordination with the federal government". Lufthansa had pushed for representatives of the business community to move into the body on behalf of the government, as is also the case with Airbus. This should encourage direct political influence. With this demand, it has now evidently prevailed. Lufthansa is no longer allowed to pay dividends until further notice. Management salaries are capped.

Spain plans final extension of state of emergency

 Spain plans final extension of state of emergency SANT-CORONAVIRUS-SPAIN: Spain plans final extension of state of emergency © Reuters / SERGIO PEREZ SPAIN PROVIDES FOR A LAST EXTENSION STATE OF EMERGENCY (Reuters) - The Spanish government wants to extend the state of emergency for the last time until the end of June, Prime Minister Pedro Sanchez said on Saturday as the number of daily deaths has decreased to an almost eight-week low.

The imminent agreement with the federal government should open the door for further help in Austria, Switzerland and Belgium, i.e. the countries in which it has other airlines with Austrian, Swiss, Edelweiss and Brussels Airlines. Austrian, for example, had requested aid of EUR 767 million in Vienna, a politically controversial claim in Vienna. Switzerland has already given Swiss support of 1.8 billion euros, but the money has apparently not yet flowed. In Belgium there are great dissonances between Lufthansa and the state because the Brussels Airlines group wants to significantly reduce the size. In order to carry out the rescue operation, Lufthansa has to convene an extraordinary general meeting. A period of four weeks applies for this. The general meeting must approve the proposed resolution with a two-thirds majority. The EU Commission will also examine the case under competition law, having recently approved aid for Air France-KLM in the amount of initially seven billion euros.

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