Lawstreet Journal

Lufthansa Board Shows Green Light to $10 billion Government Bailout Plan

Lawstreet Journal 3 Jun 2020 8:09pm

Image courtesy: Lawstreet Journal Business Lufthansa Board Shows Green Light to $10 billion Government Bailout Plan

On Tuesday, 2nd June 2020, the supervisory board of Lufthansa airlines has nodded to a € 9 billion ($10 billion) government bailout plan thrashed out between the German Government, the airline, and the European Union. The Chairman of Lufthansa Airlines Karl-Ludwig Kley on Monday, 1st June 2020, stated the following to be a very difficult decision. He said, “We recommend that our shareholders follow this path, even if it requires them to make substantial contributions to stabilizing their company.” 

Deutsche Lufthansa AG shares rose as the largest carrier in Europe cleared much of the obstacles to a loan worth EUR 9 billion ($10 billion) from the German government. Stocks gained as much as 8.3 percent and were sold 6.6 percent higher at 9.75 Euros as of 9:04 a.m., Tuesday, 2nd June 2020, the first day of trade on the Frankfurt bourse since last week.

Hurdles to the rescue came crashing down late Friday, 29th June 2020, with Lufthansa agreeing to hand over operating slots at its main hubs to win support for the deal from the European Union. The compromise was agreed by the airline's Supervisory Board in a vote on Monday, 1st June 2020. 

Lufthansa is pursuing emergency assistance after the Covid-19 pandemic struck a decades-long aviation boom, suspending planes, and reducing cash reserves. After the crisis, the company expects its fleet to be 100 smaller aircraft, resulting in a loss of 10,000 jobs. 

While investors still need to vote on a package that will dilute their holdings at the meeting 25th June… Continue Reading...

Tagged: Airlines  
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