Top shareholder backs Lufthansa rescue deal

epa08503431 View of German flag carrier Lufthansa's logo at an empty counter inside a terminal of the international airport in Frankfurt am Main, Germany, 23 June 2020. According to media reports, the German government and Lufthansa have reached an agreement on a bailout rescue package. On 25 June 2020 Lufthansa will hold its Annual General Meeting. EPA-EFE/RONALD WITTEK

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Lufthansa’s top shareholder said he would back a nine-billion-euro government rescue package, removing the threat of a last-minute veto that could have plunged the German airline into bankruptcy.

“I will vote for the agreement,” German billionaire Heinz Hermann Thiele told the Frankfurter Allgemeine Zeitung newspaper on the eve of an extraordinary general meeting where investors will decide on the fate of the coronavirus-hit giant.

Chief executive Carsten Spohr has warned that “the future of the company” is at stake after the pandemic throttled Lufthansa’s usual flood of passengers to a trickle for several months this year.

Spohr will address the online meeting set to begin at 10.00 GMT, urging investors to back the plan he hammered out over weeks of talks with ministers and the European Commission. The €9bn ($10bn) plan includes the state claiming a 20% stake.

Even with the government aid, Lufthansa has said it may have to slash thousands of jobs as travel demand is expected to stay below pre-pandemic levels for years.

But in another boost for the airline, it struck a deal with German flight attendants’ union UFO late Wednesday to cut €500m in costs by 2023 while avoiding cabin crew layoffs. The deal still needs to be approved by union members.

Lufthansa shares jumped more than 16% at 23.00 GMT in after-hours trading as investors digested the latest developments.

Via Reuters

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